Vietnamese prosecutors support top taxi firm in $1.8 million lawsuit against Grab

By Ky Hoa   October 23, 2018 | 08:53 pm PT
Vietnamese prosecutors support top taxi firm in $1.8 million lawsuit against Grab
A man is about to get on a Vinasun cab in Ho Chi Minh City. Photo by VnExpress/Phuong Dong
Prosecutors have argued in a trial in HCMC that Grab must pay Vinasun compensation for losses it caused through "unhealthy competition."

At a hearing Tuesday the city People's Procuracy rejected ride-hailing firm Grab's argument that the court had no jurisdiction over the case, saying it does since it is a commercial dispute.

Prosecutors also asked the judges to deny Grab's request to summon representatives of Vietnam's Ministry of Transport, other companies participating in the ministry's pilot scheme for ride-hailing services and the company responsible for estimating Vinasun's losses.

As for Grab's claim it is a tech firm and not a taxi company, they said since the firm directly assigns drivers, sets fares, sets regulations for drivers, and offers promotions, there is enough reason to dismiss this too.

"Vinasun’s demand for compensation for reduced profits is well founded since Grab was dishonest in its business declaration and ran promotions in contravention of regulations, causing over 70 percent of Vinasun's customers to switch to Grab due to lower fares."

Vinasun's after-tax profit was nearly VND320 billion ($13.7 million) in 2015 and VND295 billion ($12.63 million) in 2016, but dropped to VND53 billion ($2.27 million) in the first half of 2017, by which time over 8,000 drivers had quit and hundreds of cars had stopped running due to a lack of drivers.

Prosecutors asked the court to accept Vinasun's petition for compensation of VND42 billion (nearly $1.8 million) in one payment.

Grab continued to insist the case did not come under the court's jurisdiction and that it is a tech firm.

Dismissing the claim it had caused losses to Vinasun, Grab cited market research purporting Vinasun has been losing customers due to other reasons such as driver's attitude, long waiting time and declining car quality.

Vinasun filed the suit against Grab at the HCMC People's Court in June last year accusing the Malaysia-based firm of abusing the Ministry of Transport’s pilot scheme and committing violations.

Claiming Grab's illegal activities had caused damages to it, Vinasun claimed to have suffered losses of nearly VND76 billion ($3.25 million) in 2016 and the first half of 2017, of which nearly VND42 billion (nearly $1.8 million) was caused by Grab.

The trial began last February, but was first adjourned a month later due to the need for more evidence and again last month when Grab protested against the evaluation of Vinasun's losses and refused to attend.

The court is scheduled to hand down its verdict next Monday.

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