The traditional taxi operator requests exemption from interest and late payment fees in order to maintain and develop, as well as create jobs for 24,000 employees.
|Mai Linh does not have the finances to pay off its debts and maintain daily operations
At the end October 2017, Mai Linh Group’s accumulated outstanding debts of social insurance, health insurance, and unemployment insurance was over VND182 billion (around $8 million), including VND105 billion ($4.6 million) of original debts and VND77 billion ($3.4 million) of interest.
Mai Linh has just sent a request to the National Assembly Committee for Social Affairs, Ministry of Finance, and the Vietnam Social Security to cancel the interest and the penalty on its social insurance debts.
In the document sent to these agencies, Mai Linh confirmed that the company, along with others, are facing fierce and unfair competition from Uber and Grab. In particular, there are many different business conditions applicable to traditional taxi firms that Uber and Grab are exempt from. This lopsided competition has significantly affected the company’s plans and operations.
Mai Linh’s revenue has declined by 30 per cent from the years before the entrance of Uber and Grab.
The company has done its utmost to ensure the income of employees as well as find solutions, such as negotiating debts with individual lenders, negotiating interest rates, and opening up technology/app-based motorbike services. However, the company could only maintain its daily operations.
Ho Huy, chairman of Mai Linh, said that without assistance from state agencies, the company’s revenue will not be able to cover its due, overdue, and outstanding debts, social insurance, health insurance, and late payment fees.
In the document, Mai Linh requests exemption from interest and penalty fees to maintain and develop as well as create jobs for 24,000 employees. The company’s original debts will be paid within the next 20 years.
The group’s financial report showed that its accumulated loss was nearly VND800 billion ($35.2 million) by the end of the second quarter of 2017, equaling 80 per cent of its charter capital. Thus, the auditing agency grew concerned whether the company would be able to maintain operations.
As of June 2017, Mai Linh employed a total of 24,000 people, down nearly 6,000 (20 per cent) compared to the end of 2016.
The company is besieged by difficulties on all sides. The MNC ticker of Central Mai Linh on HNX is traded at VND4,400 apiece, while the shares of Northern Mai Linh (Upcom) are below VND3,000.
||Mai Linh reports loss of 6,000 employees in first half
In the race for market share between traditional taxies and Uber and Grab, along with Vinasun, Mai Linh Group also saw a decrease in employees and net revenue in the first half of this year, according to newswire Vnexpress.
||Grab and Uber fined, Mai Linh and Vinasun losing value
From early 2017, nearly 100 Grab and Uber drivers have been financially penalised for nearly VND350 million ($15,400) due to lack of listed identification information, such as name and phone number of the companies. At the same time, both Grab and Uber still enjoy substantial growth in customer base, while traditional taxi operators Mai Linh and Vinasun’s stocks are losing their shine.
||Mai Linh confident in competition with Grab and Uber
In the face of the strong development of technical companies in the transportation business, Mai Linh Group is confident in taking the competition to Grab and Uber.