Singapore-backed taxi joint venture dissolved

By Phuong Dong   June 28, 2019 | 09:03 pm GMT+7
Singapore-backed taxi joint venture dissolved
Many taxi firms in Vietnam met fierce competition from ride-hailing start-up Grab. Photo by Shutterstock/VTT Studio.

ComfortDelgro Savico Taxi, a JV between Vietnam's Savico and Singapore's ComfortDelGro, has been dissolved after loss-making years.

ComfortDelgro Savico Taxi was formerly known as Tourism Taxi Savico Enterprise, established in March 2005 as a joint venture between Saigon General Services JSC or Savico (40 percent) and ComfortDelGro (60 percent) – a leading public passenger transport operator in Singapore.

The two firms closed ComfortDelgro Savico Taxi’s operations last March to preserve its capital after some loss-making years. They decided to dissolve the venture after one year searching opportunities to revive it in vain.

Savico, which announced the dissolution on Thursday, expects to receive about VND31.4 billion ($1.35 million) from the dissolution. This figure is about VND30 million ($1,286) lower than the company’s book value as of the end of last year.

Savico representatives declined to comment on proceeds from liquidating remaining assets, or plans to seek new joint venture partners in the taxi business.

After nearly 10 years of operation, ComfortDelgroSavico Taxi had to restructure and upgrade its fleet to maintain an exploitation rate of 90 percent, which meant heavy investments.

However, just when it was becoming profitable enough to offset cumulative losses of the previous years, the joint venture met fierce competition from ride-hailing start-ups Grab and Uber. 

ComfortDelGro's financial statement shows the Singaporean firm’s revenue in Vietnam fell to $3.3 million in 2018 from $6.8 million the previous year.

Once considered a lucrative market by ComfortDelGro, the company’s Vietnam earnings accounted for less than 1 percent of its total revenue in 2018.

Most of this income came from a 70 percent stake ComfortDelGro owns in another local taxi firm called VinaTaxi, which takes up the third largest market share in the HCMC taxi market.

 
 
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