Vietnam slams brakes on GrabTaxi plan to expand operations

The Transport Ministry has shot down a GrabTaxi plan to extend its services to provinces like Ninh Thuan, Dong Thap and Gia Lai.

The ride-hailing firm now is allowed to operate in the five cities and provinces of Hanoi, Ho Chi Minh, Da Nang, Khanh Hoa and Quang Ninh. 

However, the firm said its GrabTaxi service is quite different from the GrabCar, so GrabTaxi should be allowed to operate nationwide. 

Both GrabTaxi and GrabCar operate under the same Grab application, but GrabTaxi offers a run-of-the mill taxi service, while GrabCar is a service which connects customers with private cars for ride-hailing purposes.

In January, a GrabTaxi representative said: “The firm always abides the law and we do not allow GrabCar to operate outside the Ministry of Transport’s designated cities and provinces.”

Grab is currently under an investigation by Vietnamese authorities after its acquisition of Uber’s Southeast Asia operations shows signs of breaching local antitrust laws.

The investigation, which began on May 18, is estimated to take 180 days and can be extended by another 120 days, said the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade.

Prior to the statement, a VCA investigation had found that Grab’s market share in Vietnam had exceeded 50 percent since its ride-hailing rival Uber left the Southeast Asian market in April.

Vietnam's 2004 Competition Law requires that all mergers and acquisitions (M&As) that result in a company gaining over 30 percent of market share must be reported to competition authorities.

M&As that result in a company gaining over 50 percent of market share are restricted.