ComfortDelgro Savico Taxi, a joint venture of Saigon General Service Corporation (Savico) and Singapore’s largest taxi operator ComfortDelGro, has suspended its business to preserve funds and restructure its taxi-related business in the wake of competition from rivals.
In an announcement on Ho Chi Minh City Stock Exchange, the joint ventures said that it has completed the business restructuring at ComfortDelgro Savico Taxi and is looking at appropriate business opportunities.
Last year, ComfortDelGro Corp acquired a 51 per cent stake in Uber Technologies Inc.‘s car rental unit in Singapore for S$295 million ($218 million), forming a joint venture with the ride-hailing giant.
Meanwhile, Savico’s management said in its business result report in 2017 that ComfortDelgro Savico Taxi has been experiencing difficulties in recent years. After nearly 10 years of operation, this joint venture has to restructure the fleet and improve service quality to maintain vehicle operating rates while still facing pressures from Grab and Uber.
Even though operating in Ho Chi Minh City for such 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.
ComfortDelgro Savico Taxi’s profit in 2017 stood at VND235 million ($10,300) of profit, down from around VND3.3 billion ($145,000) in 2016 and nearly VND7 billion ($307,000) in 2015.
Established in 2005, the joint venture ComfortDelgro Savico Taxi has a charter capital of VND79.3 billion ($3.48 million), of which Savico owned 40 per cent stake. Meanwhile, Savico is a state-owned enterprise operating in financial investment and development cooperation of real estate projects.
In another move, the ride-hailing Uber office in Hanoi has announced that it has temporarily closed shortly after Singapore’s ride-hailing major Grab on Monday announced that it has acquired Uber’s Southeast Asia operations, local media observed.
Uber drivers (motorbikes and cars) in Vietnam have also received notice that they will be moved to Grab applications from April 8.