New Hanoi taxi merger to fight Grab on the streets

G7 was formed in October by Thanh Cong, Ba Sao, and Sao Hanoi. Together, they have about 3,000 cars, accounting for around 20 percent of taxis in the Hanoi area.

The G7 base fare is VND9,900 (43 U.S. cents) for the first one km, while Grab charges VND20,000 (86 U.S. cents) for the first two km.

The entrance of the new brand is expected to increase competition between traditional taxis and raid hailing firms like Grab.

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

Before Thanh Cong, Ba Sao, and Sao Hanoi teamed up, annual sales at the three companies had declined by 10-15 percent on average over the past few years.

The number of taxi companies in Hanoi has also fallen down to 70 taxi now, from 115 in 2010.

Joining the fight

The taxi trio is not alone in pushing back against the ride-hailing industry.

In March, southern taxi firms ComfortDelgro Savico and Vinataxi had merged with the same purpose.

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

Mai Linh, Vietnam’s No. 1 taxi operator, has developed a smartphone app similar to that of Grab. Meanwhile, second-ranked Vinasun has launched a ride-hailing service using Facebook’s Messenger app, enabling customers to hail cars and make complaints and requests directly, much like Grab.

But Grab, the dominant player in the ride-hailing business in Vietnam, is also working on strategies to compete better with local taxi firms.

Several months ago, it introduced Grab for Business in Vietnam, a service that helps a company track the trips its employees make to limit unnecessary trips and control expenses.

Grab is also deploying various policies to attract drivers by offering bonuses and opening stops with free wifi and coffee.