Fuelled by the fear of Grab acquiring their member firms, the taxi associations from the three regions proposed the Ministry of Transport (MoT) to issue solutions to stop business co-operation contracts between Grab and traditional taxi firms.
Taxi associations team up to fight Grab
Notably, these taxi associations asked MoT to cancel business co-operation contracts between Grabtaxi and its traditional taxi firm partners before the new decree, which will replace the existing Decree No.86/2014/ND-CP, is issued.
Besides, these taxi associations required MoT to manage Grab’s operations as if it was a traditional taxi firm.
Furthermore, these taxi associations also proposed MoT to decrease business conditions (including lowering fares and lower the frequency of periodic health checks for the taxi drivers) so that they can increase their competitive capacity.
These proposals were made after traditional taxi associations grew worried that if the authorities do not bring Grab’s activities under stricter management, it will continue to dominate the Vietnamese taxi market.
This is not the first time that taxi associations object against Grab. Notably, in March, before Uber left Vietnam, taxi associations requested temporary policies to hamper Uber and Grab while local authorities build a new decree on business and conditions for transportation business by automobile.
The taxi associations of Hanoi, Ho Chi Minh City, and Danang submitted documents to Prime Minister Nguyen Xuan Phuc to protest the government’s decision to extend the pilot programmes on using technology applications to connect and manage transport activities until the new decree replacing the existing Decree No.86/2014/ND-CP comes into effect.
According to the three taxi associations, local authorities’ extending the pilot ride-hailing service programme (which came into effect in January 2018) instead of tightening the operations of Uber and Grab would disturb the Vietnamese transport market and make it difficult for traditional taxi firms to maintain operations.
Along with taxi associations’ protests, traditional taxi firms have merged with each other to fight Grab.
Most recently, taxi operator Mai Linh Group will merge Mai Linh Central JSC and Mai Linh Northern JSC in an effort to streamline its cumbersome operations and concentrate resources to compete with Grab.
Besides, the representative of Vietnam Taxi Company (Vinataxi) announced the plan to merge with ComfortDelgro Savico Taxi—the taxi brand that had to suspend operations in March due to heavy competition.
Backed by ComfortDelGro Corporation Limited from Singapore, the merger between Vinataxi and Savico Taxi may help them overcome the competition with Grab and other ride-hailing applications.