Vietnam rejects Grab’s expansion plan; company says move won’t affect GrabTaxi

A passenger sits next to Grab corner sign as he waits for a Grab bike at Sudirman train station in Jakarta, Indonesia, March 26, 2018. REUTERS/Beawiharta

Vietnam’s Ministry of Transport has rejected the expansion plan of ride-hailing firm Grab Vietnam Co Ltd in three provinces Ninh Thuan, Dong Thap, Gia Lai which are not included in the pilot program, local media reported.

While encouraging the application of technology in the transport space, the ministry has ruled that such players could operate in designated localities with business licences and vehicles registered under its purview.

Grab Vietnam, meanwhile, has insisted that limitation of business operation in the five provinces of the pilot program is only applicable to GrabCar. Its other application, GrabTaxi, is registered with the Ministry of Industry and Commerce and licenced to operate nationwide.

The ride-hailing firm argued that it has no proposal for expansion of GrabCar, when contacted by DEALSTREETASIA. It is only considering further expansion of GrabTaxi in some other provinces.

Under the transport ministry’s decision No 24, GrabCar, one of the Grab’s applications, is not allowed to operate a business outside Hanoi, Ho Chi Minh City, Khanh Hoa, Da Nang and Quang Ninh.

Recently, Vietnam’s antitrust regulator said that the Singapore-based ride-hailing major appears to have a monopoly in the country following its acquisition of Uber’s Southeast Asia operations in March.

The Competition and Consumer Protection Department (CCPD) stated that Grab’s market share in Vietnam, after the deal, is over 50 per cent, in violation of the economic concentration prescribed by Law on Competition 2004.

It, therefore, is considering launching a formal investigation into the takeover of Uber by rival Grab to examine if it leads to a monopoly situation.

Meanwhile, Grab Vietnam is facing competition from local ride-hailing firms. 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 targeting to compete with ride-hailing major 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.

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