Savico Vietnam shuts down taxi company

Saigon General Service Corporation (Savico) announced to the State Security Commission of Việt Nam and HCM City Stock Exchange that its taxi brand – ComfortDelgro Savico Taxi – has been closed to preserve funds and reengineer its taxi-related business plans.

ComfortDelgro Savico Taxi was opened in 2005 as a joint venture between Savico and ComfortDelGro Corporation Limited, a Singaporean multinational land transport company.

Even though ComfortDelgro Savico Taxi has operated in HCM City for a long time, its market share has always been relatively modest, with a fleet of only around 400 cars, compared to Vinasun Taxi’s fleet of more than 6,000 cars.

For the past few years the taxi company has incurred high costs due to constant improvement of its cars and service quality. However, tough competition from Grab and Uber has caused the company to struggle to make much profit from the investment.

According to Savico’s 2017 report, ComfortDelgro Savico Taxi only made around VNĐ235 million (US$10,300) of profit, down from around VNĐ3.3 billion (US$145,000) in 2016 and nearly VNĐ7 billion (US$307,000) in 2015.

On March 16, ComfortDelGro said that ComfortDelgro Savico Taxi has merged with Vinataxi (70 per cent of whose shares are owned by ComfortDelGro).

According to statistics from the city’s Department of Transport, as of 2017, there were around 35,000 taxis in HCM City, including around 24,000 Grab and Uber taxis.

Many of Việt Nam’s traditional taxi companies are struggling to compete with Grab and Uber.