Under the strict competition posed by Uber and Grab along routes from the inner cities to the airports, traditional taxi companies continuously issue strategies to entice customers, including cheap fare packages and “bombarding” customers with private messages.

Traditional taxi companies are throwing out promotions and discounts to take on Uber and Grab

Cheap fares and promotions galore

On the occasion of Uber and Grab adjusting fares along the routes from the inner city to Noi Bai International Airport after failing in issuing the VND150,000-160,000 ($6.60-7.04) fare earlier this year, traditional taxi brands in Hanoi decided to issue discounts and promotion programmes to take up the gauntlet, according to newswire Vnexpress.

Accordingly, almost all traditional taxi brands apply fares of VND160,000-200,000 ($7.04-8.81) for the route (maximum of 32 kilometres from the inner city). A number of brands went as low as VND130,000-150,000 ($5.72-6.60) per trip.  Previously, the average fare was around VND270,000-300,000 ($11.89-13.21).

Notably, Ba Sao taxi offers a fare of VND180,000 ($7.92) per trip for a maximum of 30km. Besides, the brand uses five-seat Toyota Vios cars with large trunks to serve customers.

With the fare of VND200,000 ($8.81) per trip, Noi Bai Airport also commits to take absolute responsibility in case customers miss their flights over the firm's mistakes (for example picking up customers later than scheduled or drivers causing a traffic accident on the way to the airport, resulting in the customer missing the flight).

Some other traditional taxi firms asked customers to book trips in advance via telephone for a fare of VND160,000 ($7.04) per trip.

Nguyen Anh Quan, deputy chairman of the Hanoi Taxi Association, said that with the above fare packaging, traditional taxi firms are confident in competing with Uber and Grab for airport travel.

In Ho Chi Minh City, in order to gain market share along the routes from the inner city to the airport, traditional taxi firms are “bombarding” customers with messages.

According to Hoa, a taxi driver in Ho Chi Minh City, some years ago, it was easy to earn money via trips from the inner city to Tan Son Nhat International Airport. He had an average of five trips with the average income of VND250,000 ($11.01) per trip, however, at present, the figure decreased to VND150,000 ($6.60) per trip, and the number of trips also fell due to the impact of Uber and Grab.

Thus, traditional taxi brands in general and the company where Hoa is working had to invite customers by sending out private messages on mobile phones. Certain customers can receive dozens of taxi promotion messages for airport travel every day. 

Traditional taxi brands also send messages to promote the fare packaging of VND200,000 ($8.81) for the Nha Trang-Cam Ranh route.

Extra fee making competition difficult

Despite Uber and Grab’s failure to implement the VND150,000-160,000 ($6.60-7.04) fare for airport trips, they continue to offer cheap fare packages in collaboration with promotion programmes for these routes.

Hoa from District 5 said that it takes her VND200,000 ($8.81) to go by traditional taxi firms from Vo Van Kiet Road to Tan Son Nhat International Airport, however, the figure is only VND150,000 ($6.60) with Grab and Uber. Recently, Uber and Grab also issued additional discounts of VND25,000 ($1.1) per trip—as a result, she spent only VND125,000 ($5.5) per trip.

According to Nam, a taxi driver of Uber in Ho Chi Minh City, the reason for Uber’s fare cuts is due to the company’s growing fleet. He added that although Uber’s fares decrease, drivers continue to work due to the attractive bonus policy. Notably, taxi drivers will receive at least VND500,000 ($22.01) per week if they complete a set number of trips.

Back to Hanoi, traditional taxi brands have advantages along the route from the inner city to Noi Bai International Airport, however, it is difficult for them to compete with Uber and Grab on the return route.

Vu Quoc Huy, chairman of the Board of Directors of Ba Sao, said that high airport concession fees stop traditional taxi brands from exploiting. Notably, each taxi has to pay an average of VND3 million ($132.08) per month for picking up customers at airports.

Quan expressed that traditional taxi brands are in an unfair competition with Uber and Grab in airport travel because of this extra charge.

VIR