In mid-December, the be ride-sharing app of Vietnamese transport startup the BE Group impressed with its appearance marked by yellow, the brand’s dominant color. 

The app was officially put into operation on December 17, with two major services: beBike (motorbike ride-sharing) and beCar (motor car ride-sharing). 

It is expected that be will be present in 15 cities and provinces next year and all 63 cities and provinces by the end of 2020. 

The number of driver partners is to be 10,000 per city this year and 110,000 by the end of next year, while the startup has targeted 6.6 million app downloads and over 105 million trips next year, when delivery services are also expected to be introduced. 

Mr. Tran Thanh Hai, General Director of the BE Group, said that with the cooperation of professional driver partners along with a modern business model, transparency, and an understanding of Vietnamese psychology, be can be competitive and win share in the market.

Bustling year

The Go-Viet app, supported by Indonesia’s Go-Jek, marked its official launch in Vietnam at an event on September 12 in Hanoi as part of its $500 million international expansion. 

It is now present in Vietnam’s two major cities - Hanoi and Ho Chi Minh City. 

Mr. Nguyen Vu Duc, Go-Viet’s Co-Founder and CEO, said Vietnamese people have responded positively to the app. “When tested in Ho Chi Minh City, the app was downloaded 1.5 million times despite the fact that it was not yet fully operational or officially launched,” he said. 

“Not only does Go-Viet offer excellent services for local passengers, it also provides valuable access to additional income for driver partners, with around 25,000 joining the platform to date.”

Another ride-sharing app, FastGo, was officially launched in Hanoi on June 12 by NextTech after three years of development. 

FastGo provides three core services: Fast Car - a service for individual drivers wishing to increase their income, Fast Taxi - a service linked to taxi companies, and Fast Luxury - offering trips in luxury vehicles.

FastGo expanded to Ho Chi Minh City in July, Da Nang in August, and other major cities over the remainder of the year. Mr. Nguyen Huu Tuat, CEO of FastGo Vietnam, told VET that, by 2020, it will have a market share of 40 per cent in Vietnam and rank in the top three in Southeast Asia, providing customers with a practical app and moving towards a non-cash ecosystem.

In addition to be, Go-Viet, and FastGo, a number of other apps have also been launched, such as Aber, Vato, T.Net, and Xelo, joining major existing player Grab to seize opportunities in the market. 

“The continued development and launch of tech companies in the transport sector expresses the potential of the market,” said Mr. Tuat. “The passenger transport field will grow from $2 billion in 2017 to $5 billion in 2020.” 

Competition, though, has been fierce. As soon as it launched, Go-Viet introduced a promotional price of VND5,000 ($0.2) per ride of less than 8 km and additional bonuses for drivers to ensure a minimum income of VND30,000 ($1.2) per ride. 

FastGo also introduced major promotions, such as reducing rides from VND10,000 ($0.4) to VND20,000 ($0.8) and no premium fares during peak hour. 

While Grab maintains promotions in all of its services, when customers use the GrabPay e-wallet they may be able to enjoy rides for VND0.

Many analysts have said that the race to pour money into promotions to recruit drivers and attract passengers is a familiar step for ride-sharing apps when entering Vietnam, but market share will fluctuate. 

Mr. Do Hoa, a strategic expert, recently told local media that this race is a long-term proposition, so is only available to businesses that have financial capacity and support. 

Though receiving investment of VND100 million ($4,000) from the Phuong Trang JSC, the Vato app is still only active in Ho Chi Minh City. Mr. Tran Thanh Nam, Managing Director of Vato, told local media that after its launch the app experienced a period of slowdown. 

The Mai Linh Group’s Mai Linh Bike app, meanwhile, was launched in mid-November 2017 with the goal of reaching 1 million motorbikes by 2020, but it virtually disappeared from the streets after only half a year. The Aber app announced it would cease operations in August after a short period of operations.

Traditional taxi firm Vinasun sued GrabTaxi Vietnam last February for “unhealthy competition” and dumping its services on the domestic market to drive out local competitors, seeking compensation of VND41 billion ($1.8 million). The Ho Chi Minh City People’s Court adjourned trial proceedings in early December. 

Mr. Jerry Lim, Country Head of Grab, told VET that they have been sincere in putting forward a deal to work with Vinasun and have the case settled amicably out of court for the benefit of the people of Vietnam. 

Although Grab continues to dominate the market, after Uber exited the Vietnamese market, it now faces competitive pressure from new apps and traditional taxis. 

Plans for the future

Given the competition in the market, the Vietnam Taxi Alliance was officially launched in Hanoi on December 10. It will operate countrywide through a ride-sharing app called EMMDI, a vehicle management software developed by scientists in cooperation with the Hanoi National University. 

Seventeen traditional taxi companies have already joined, six of which are based in Hanoi: Thanh Nga, Van Xuan, Thang Long, Sao Mai, Long Bien, and Que Lua. Next year, the Alliance aims to extend its coverage to all 63 cities and provinces nationwide with a fleet of more than 20,000 vehicles. 

Dr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said the establishment of an alliance between taxi companies and the use of ride-hailing software is a positive sign. 

“For traditional taxi companies to succeed, they need to change their way of doing business, using new technologies and adopting to the shared-economy model,” he said.

Three taxi companies - Thanh Cong, Sao Hanoi, and Ba Sao - previously joined together to form the G7 taxi union in Hanoi to compete with Grab. 

They have about 3,000 cars all told, accounting for some 20 per cent of the taxis on Hanoi’s streets.

Grab is also working on strategies to better compete with local taxi companies. Grab and Mekong Taxi announced a cooperative arrangement in October to deploy GrabTaxi services in the Mekong Delta’s Bac Lieu province. 

“Our partnerships with taxi companies aim to help taxi driver-partners be more productive on the road, by increasing taxi utilization and reducing idle time,” said Mr. Lim. 

A Grab Vietnam survey revealed that drivers for taxi companies who use its platform for ride-sharing can earn up to 30 per cent more than just relying on regular taxi calls. 

Mr. Lim believes that technology and taxi companies go together to add greater value to the transport sector, including enabling taxi drivers to be more productive and earn higher incomes while continuing to observe the principles of competition.

FastGo, meanwhile, has signed a memorandum of understanding (MoU) with Open99 Taxi on cooperating to provide comprehensive services to customers and other FastGo partners. “FastGo is an open platform, and any taxi company can participate without any requirements and this is a relatively effective cooperative format,” said Mr. Tuat.

Meanwhile, be has another plan, officially registering its business in the field of transportation, unlike other ride-sharing providers. 

Mr. Hai told VET that, different to Grab, Go-Viet, and FastGo, which use idle vehicles, be will buy new cars.

Many new strategies have been adopted to develop the ride-sharing market. “A competitive market is an indispensable trend, especially in the field of ride-sharing apps, in the future, which gives users more options to book more services, while drivers can earn more money,” Mr. Tuat said.

“Competition is also an opportunity to highlight our advantages and narrow the gap with major competitors.”

VN Economic Times