Mai Linh confident in competition with Grab and Uber

Grab and Uber litigation secondary

According to Ho Huy, chairman of Mai Linh, in reality, blaming technical companies like Uber and Grab only shows how traditional taxi brands are unable to renew themselves. If these traditional taxi brands cannot find a solution, they will lose their brand’s value and will be slowly drifting towards bankruptcy.

“Instead of harassing Grab and Uber, it is important for Mai Linh to review the company’s operation mechanism as well as to learn from the advantages of Grab and Uber. Mai Linh agrees with Vinasun’s taking Uber and Grab to the court, however, it is not our major target. The group will focus on investing in technology as well as changing the management system,” said Huy.

However, Mai Linh will still join the lawsuit as Grab has committed copyright infringement at their expense. Notably, Grab violated Decree No.86/2014/ND-CP on the paint colour of cars, confusing passengers about their brands. Besides, Grab used Mai Linh’s cars in some of its advertisements. Huy asked Grab to stop these violations, however, they have yet to receive a response.

Regarding business culture, Huy said that with a fleet of 50,000 cars, Uber and Grab have caused a loss of trillions of VND of tax each year.

All enterprises operating in Vietnam must complete three responsibilities - efficient operations and development, creating stability for employees, and contributing tax to the state budget.

Determination to change

Uber and Grab are not transportation business companies, they are only IT firms investing and developing a technical infrastructure and a mobile application (app) to connect contracted drivers with passengers.

Thanks to the app’s convenience, it has created a competition between IT firms such as Uber and Grab, and traditional transportation business companies.

Thus, Mai Linh has invested in technology to enhance its competitive capacity. Notably, the firm applied a smart call center to replace employees, reducing staff by 50 per cent.

Mai Linh is also completing procedures to propose the Ministry of Information and Communications to to use the only call center with the dial number of 1055, aiming to create convenience for passengers. In the next two months, Mai Linh will merge its call centers in the three regions into a single one. The merger is a part of its plan to list its shares on foreign stock exchanges.

The firm is also piloting a programme of five electric buses on major streets in Ho Chi Minh City. If the pilot does not make a loss, Mai Linh will put one or two more electric buses in operation. This programme is expected to help protect the environment.

Huy said that it is easier for Mai Linh to overcome the competition than it was dealing with its financial crisis in 2012 because, at the time, Mai Linh operated 10,000 taxi cabs and borne a loan interest of VND750 billion ($33.1 million), while at present, the taxi volume is 15,000 and the loan interest is VND200 billion ($8.83 million) only.

“Mai Linh aims to cover 63 cities and provinces across the country and looks to invest abroad. The firm may build Mai Linh University, specialising in transportation sector training,” Huy said.

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