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App-based taxi firms in fierce competition

Even though new Vietnamese app-based taxi service Go-Viet is rolling out many promotion programmes, it is still losing against Grab.

Go-Viet in fierce competition with Grab
Go-Viet in fierce competition with Grab

When Go-Viet first appeared in HCM City in early August, it released a series of promotion programmes such as the VND5,000 (21 US cents) package for 8km in city centres. Go-Viet drivers have been seen on nearly every street. Andre Soelistyo, president of Indonesia’s Go-Jek also said that they had taken over 10% of the market share in HCM City after three days and 35% for two-wheeler market after six weeks.

Grab responded with even more attractive discount programmes. Go-Viet drivers found ways to force Go-Viet to raise the fee to VND10,000 (43 US cents) for 6km trips in city’s centre.

In September, Go-Viet entered Hanoi and offered a promotion programme that costs only VND1,000 for 6km. But when the users hadn’t got used to the new service yet, Go-Viet raised the cost to VND10,000 after just a few days.

According to several experts, Go-Viet may not be successful in Hanoi. It seems to be struggling to compete against Grab in HCM City, who has built a huge number of users over the past years. Grab is also financially-stronger and can release more discount programmes.

Before Go-Viet officially entered Hanoi, Grab had released a number of discount programmes with other partners, including a 50% discount for 10 rides, 30% for rides to and from Aeon malls, and VND10,000 discount per ride for 16 rides for Mastercard users.

It also offers bonuses for drivers to maintain its fleet. GrabBike drivers will be awarded VND220,000 (USD9.37) for 23 rides per day or VND50,000 for eight rides. This system was created in order to compete with the point reward system in Go-Viet in which drivers will be given VND220,000 for 28 points.

Several other app-based services have also debuted recently. MailinhBike has over 4,500 drivers and will offer many programmes in October such as a VND15,000 (64 US cents) discount per ride on weekends. It also provides VND3,000 to VND3,500 for drivers who have to go to get customers at long distances.

Nguyen Van Sang, director of T.Net Company, said their T.Net service was focusing on the market for car passengers in Hanoi and HCM City to avoid competition with other giants. The drivers will be awarded VND800,000 (USD34) for 50 rides per day and VND200,000 for 15 rides.

Meanwhile, Nguyen Chi Luan, director of Go-ixe Saigon, said they only provided IT services. The traditional taxi firms carry out their transactions via the Go-ixe app so they haven’t had direct competition with any app-based taxi services.