Motorbike taxi driving unsustainable for laid off workers

By Nguyen Hang   July 25, 2023 | 11:38 pm PT
More than a few workers made unemployed by increasing layoffs in Vietnam recently have become motorcycle taxi drivers only to realize it’s not a lasting solution.
A GrabBike driver at work in Hanoi. Photo by Reuters

A GrabBike driver at work in Hanoi. Photo by Reuters

After starting his workday at 5 a.m., at 10 a.m. Le Van Manh had completed only one trip, which made him VND40,000 (around $1.7) in cash.

Manh started working as a motorbike taxi driver four months ago, after two years suffering from his old factory’s unstable business performances.

"The factory started layoffs, forced us to work overtime, and cut down on our salaries," he said.

His income as a factory worker used to be around VND20 million, but was reduced to only half that starting last year. Not being able to get by with that income, he quit his job and turned to ride-hailing applications, hoping for better financial rewards.

Manh spent around 12 hours a day on the road after his career turning point. Things went smoothly at first, as he was able to earn between VND400,000 and VND500,000 a day during the first two months working as a motorbike taxi driver.

But the number of drivers has increased over the recent months, and Manh now has to share his customer pool with his new "colleagues," and thus, earn a lower income of only VND300,000, or even VND100,000 sometimes, per day.

"I can only complete around 10 trips a day now, compared to over 20 trips a day before," he said.

According to data published by the General Statistics Office of Vietnam, more than 149,000 workers lost their jobs in Q1 this year, 13% higher than the previous quarter. Of these laid off workers, most worked in companies in the FDI sector based at industrial areas in and around the provinces of Dong Nai, Binh Duong, Bac Ninh, Bac Giang.

The Private Sector Development Research Board projected that the layoff wave could continue in this year’s second half, due to both external and internal challenges for businesses.

Not requiring any educational background or specific skill sets, motorbike taxi drivers are the first career choice for many laid off workers to make a new living.

Hoang Van Trieu, a former truck driver at a Binh Duong-based wood warehouse, started working as a full-time motorcycle taxi driver three months ago, after becoming unemployed when his company went bankrupt. Having expected that the new occupation would help him cover his living expenses, he got depressed after a while.

"I spend about 10 to 11 hours a day, in exchange for between VND300,000 and VND400,000," he said. "I cannot get by if I maintain this as my full-time job."

He is now trying to look around for other career opportunities. The best scenario he can think of is being able to find an office job, which allows him to leave at around 4 p.m. or 5 p.m., so that he can hit the road and start the second "working shift" of his day as a motorcycle taxi driver until before midnight.

Ride-hailing applications, of which the most popular in Vietnam are Grab, Gojek, and Be, were once considered a life saver for those that were looking for another occupation, including laid off workers looking for career chances or fresh graduates waiting for a job after finishing school.

The Vietnam General Confederation of Labor estimated in 2021 that there were over 200,000 partner drivers working with Grab, which rose from around 175,000 in 2018. Of these, around 26% graduated from a higher educational institution or equivalent.

Gojek reported that the platform surpassed 200,000 drivers in mid-2021, while Be announced that the number of its partner drivers surpassed 100,000 at the beginning of the same year.

Drivers’ daily income was as high as between VND500,000 and VND600,000 at that time.

However, things have become harder for drivers recently. The supply of drivers increased and the fees taken out by the applications rose and currently range between 30% and 39% of the amount charged to customers. All of these mean it has become harder for drivers to maintain their income.

Nguyen Dinh Vuong, former worker at a Hanoi-based leather company, decided to return to his hometown after months of suffering from this "high cost, low reward" job. He spent around 12 hours working a day to get between VND300,000 and VND400,000 in return. With this income, he did not have much left after paying his bills.

"Motorcycle taxi drivers in Hanoi have to work at least 12 hours to earn enough to get by," he said. "The cost of living in my hometown Thanh Hoa is lower, so I spend less, and don’t have to work that hard."

According to him, many former industrial workers, who were laid off due to the downfall in the orders, are trying their best to get by, in the hope of an economic recovery that will lead to improved business performances and thus, higher demand for labor.

Dr. Huynh Thanh Dien, an economic expert, made a prediction aligning with this hope. He projected that the labor market would soon retrieve a state of stability and temporary motorcycle taxi drivers would soon be able to return to their occupations.

He also warned that partner drivers for ride-hailing applications should not be considered a long-term career goal, as the job cannot provide a stable income in the long run. Instead, it should be treated as a temporary "cover" occupation only while the economy follows its natural rhythm and proceeds on its way to recovery.

In the meantime, these people have no other choices than optimistically enduring.

"The economy can’t be gloomy forever," Manh said. "As I heard from the news, the situation is predicted to become better in 2024, so I will try to get by and wait until then."

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