Behind dispute between traditional taxi and ride-hailing company in Hanoi

Thanh Cong, Ba Sao and Sao Ha Noi are set to become G7 Taxi in a bid to take on ride-hailing behemoth Grab.

In April representatives of top traditional taxi firms had sat down to discuss the idea of building one common ride-hailing app for all of them.

Nguyen Cong Hung, chairman of the Hanoi Taxi Association, said: “Traditional taxis, each with their own app, are now trying to compete with Grab. But we are divided, therefore we need to unite.”

The meeting came after logistics firm Phuong Trang announced it had invested $100 million in ride-hailing app Vato and leading taxi firm Mai Linh started offering benefits to attract drivers.

In March southern taxi firms ComfortDelgro Savico and Vinataxi had merged to take on Grab.

Vinataxi, the third largest taxi firm in HCMC, was confident the merger would increase its growth sixfold this year.

But Grab is also busy.

While the acquisition of Uber’s Southeast Asian business last March has allowed Grab to become the dominant player in the ride-hailing business in Vietnam, it is working to improve its strategies to compete with local taxi firms.

The company introduced Grab for Business in Vietnam earlier this month, a service that helps a company track the trips its employees make to limit unnecessary trips and control expenses.

Following the recent entry of Indonesia’s Go-Jek as Go-Viet, Grab is deploying various strategies to attract drivers by offering bonuses and opening stops with free wifi and coffee.

‘Huge unfairness’

The Hanoi Taxi Association earlier this month wrote to Prime Minister Nguyen Xuan Phuc saying Grab’s operation has created a “huge unfairness in terms of business conditions which demolish traditional taxi businesses and cause instability in society.”

It wanted GrabCar to be considered “electronic” to guarantee fairness and all GrabCar vehicles to carry the label “electronic taxi.”

The Ministry of Transport has labeled GrabCar as “electronic taxi” in then newest version of its bill on transport regulations, but does not require its vehicles to carry the legend.

In a report related to the bill, which is expected to be discussed at the next session of the National Assembly in October, the Central Institute for Economic Management says lawmakers should not use old standards to new business models.

“It is a grave mistake to force Grab to operate as a traditional taxi,” Nguyen Dinh Cung, chairman of the institute said.