Lunar New Year surge pricing enrages GrabBike users

By Phuong Dong   January 22, 2017 | 09:00 pm PT
Lunar New Year surge pricing enrages GrabBike users
A GrabBike driver carries his passenger through Tan Binh District, Ho Chi Minh City. Photo by Reuters
Treble fares and heavy traffic add up to the Tet holiday stress in Vietnam.

The week before Vietnamese people ring in the Year of the Rooster has been the busiest time of the year for ride-sharing services.

Due to the rising demand, GrabBike, a mobile hailing app for motorcycle taxi services, has applied what is known as “surge pricing”, meaning that fares have more than tripled over the past week. The company says the move is aimed at ensuring there are enough drivers on the road, but customers are not impressed.

Long, an office worker in Ho Chi Minh City's financial district, headed home for the Lunar New Year holidays on a late night coach trip, leaving the city at 9 p.m. It usually costs him only $2.6 to travel the 7 kilometers by motorbike taxi from his apartment to the coach station. However, this time he was shocked to find that GrabBike had nearly tripled the fare to $7.1.

The inflated cost annoyed Long who felt like he was getting fleeced by the service when he needed it the most.

He decided to return to traditional motorcycle taxi drivers who pick up passengers on every corner in the city.

“After negotiating, the driver agreed to take me for $3.5,” said Long, who had ditched old-fashioned motorcycle taxis for GrabBike thanks to its convenient booking service and lower fares offered by the app.

The arrival of hailing mobile apps like Uber and Grab to Vietnam in recent years has put traditional motorcycle taxi drivers under great pressure with a rapidly shrinking market share.

Many traditional motorcycle taxi drivers who are usually unable to compete with Grab have suddenly made a strong comeback over the past week as Grab’s surge pricing scares away customers.

It usually costs Phuong, a resident in District 7, only $3 to get to Tan Son Nhat Airport. The price surged to $8 last Saturday despite her effort to avoid the rush hour by booking the trip at noon. Phuong agreed to the inflated fare, but after more than 30 minutes, there were still no GrabBike drivers in sight. She had no choice but take a cab to the airport.

Higher prices are supposed to keep more drivers on the road during the busiest times. However, Long, a GrabBike driver, said the higher fares had made little difference to his income due mainly to heavy traffic that slows journey times.

“A pick-up point was just 1.5 kilometers away but it took me more than 25 minutes to get there the other day,” said Long, adding that when he arrived at the pick-up point the passenger had already cancelled the trip.

Ngo Nguyen Hoang, chief executive of Grab, said despite the higher fares leading up to Tet, the company has been unable to meet the demand.

“We simply can’t reach our customers,” he said. “Before passengers book their trips, they will see the total cost of the rides in advance with upfront fares.”

He confirmed that there will be no more unwelcome surprises heading into the holidays.

“We are still offering discount coupons. There is no way we are fleecing our customers in the week leading up to Tet,” Hoang continued.

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