Post-Uber: How Vietnamese taxi firms plan to take on Grab

Vietnamese transport companies are stepping up their games in the wake of ride-hailing firm Grab's takeover of rival Uber's Southeast Asia business.

Local firm Phuong Trang recently confirmed that it has invested $100 million in a rival ride-hailing app called Vato (previously known as Vivu).

The app, now available on Apple and Android phones, allows customers to hail a car or a motorbike with the price shown before booking, and a unique price bargaining system that sets it apart from other apps, a company representative told local media.

Another major transport firm, Mai Linh, has reported a high number of drivers switching from Uber to Mai Linh Bike and Mai Linh Car. The company is only taking a 15 percent cut from each ride and has promised to provide free uniforms for drivers who generate a revenue of over VND2.5 million ($109) in the first month.

Mai Linh has also offered six months of free healthcare for its drivers, and guaranteed it will not raise prices during rush hour, something that sets it apart from Grab which often changes trip prices multiple times during a day.

Vietnam’s most popular taxi firm in the south, Vinasun, is trying another strategy. It wants to make adjustments in the next draft law to clearly define the term “technological taxi” and propose a price floor for transportation services which all taxi firms, including Grab, will have to follow.

Nguyen Cong Hung, chairman of the Hanoi Taxi Association, said all 77 taxi firms in Vietnam should unite to build one ride-hailing app at a meeting between top taxi firms and government transport leaders on Friday.

“Traditional taxies, each with their own app, are now trying to compete with Grab. But we are divided, therefore we need to unite,” said Hung. 

The idea was welcomed by transport leaders at the meeting, and a Phuong Trang representative offered the company's own app as a platform for the plan.

Ride-hailing firm Uber Technologies Inc announced it had agreed to sell its Southeast Asian business to bigger regional rival Grab in the end of last month. The app company will officially leave Vietnam on early April 9, and all former Uber employees will be offered new contracts by Grab, according to a Grab spokeswoman.

News of the deal has caused fear of monopoly in the country. Vietnam, Singapore, Malaysia and the Philippines are also reviewing the deal over suspicions that competition laws have been infringed.

Uber will take a 27.5 percent stake in Singapore-based Grab, and Uber CEO Dara Khosrowshahi will join Grab’s board. Grab was last valued at an estimated $6 billion.