Ho Chi Minh City-based Vinataxi and ComfortDelgro Savico Taxi, a joint venture of Saigon General Service Corporation (Savico) and Singapore’s largest taxi operator ComfortDelGro, have announced a merger plan with the aim of competing with ride-hailing major Grab.
The merger was announced at a recent Annual General Meeting of Shareholders of Transport and Industry Development Investment Joint Stock Company (Tracodi) which owns 30 per cent stake of Vinataxi.
Vinataxi, which has the third largest market share in Ho Chi Minh City, targets this year revenue of VND85 billion ($3.74 million), after-tax profit of VND8 billion ($352,000), a growth of six times compared to last year after the merger with ComfortDelgro Savico Taxi.
It also joins with ComfortDelgro Savico Taxi to set up a new system with a fleet of 300 high-tech cars to compete with GrabTaxi, which dominates the Ho Chi Minh City market.
ComfortDelgro Savico Taxi earlier 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 venture said that it has completed the business restructuring at ComfortDelgro Savico Taxi and is looking at appropriate business opportunities.
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.
Vinataxi, meanwhile, also recorded a modest profit in 2017 although the firm denied the influence of Grab and Uber to itself. It posted revenue of VND47 billion ($2 million), after-tax profit of VND1.2 billion ($52,800) last year.
Not only Vinataxi, many local ride-hailing firms have joined fray to take on Grab. Recently, a new local ride-hailing company FastGo under tech group NextTech has claimed to have officially entered the market. “We are targeting 30 per cent of market share within the first two to three years,” said Nguyen Huu Tuat, CEO of FastGo Vietnam.
Another recent entrant in the Vietnamese ride-hailing app space is ABER, or Absolute Driver, a German ride-hailing platform founded by a group of young Vietnamese engineers working in Europe.