Vietnam's ride-hailing market witnesses faster growth with local and regional players

Some of the key players in the Vietnamese ride-hailing market include Grab, Gojek (GoViet), bE, Vato, FastGo, and MyGo

The report says that the increasing economic impact of the internet and the implementation of the new Decree No.10/2020 in the transportation industry in Vietnam are the two primary factors that are likely to propel the growth of the ride-hailing market.

The entry of app-based motorbike taxi services have predominantly captured the market share of the traditional motorbike taxi, popularly called “xe om” in the country. Grab is the first company in Vietnam to launch GrabBike, an app-based motorbike taxi initially promoted in Ho Chi Minh City in November 2014, which spread throughout the country in 2015. Following the footprints of Grab, many other app-based motorbike services like Go-Jek, Aber, FastGo, VATO, MyGo, and be Group JSC had launched in the Vietnamese motorbike ride-hailing market during 2018-2019.

FastGo began its FastBike Pro service in Hanoi in January 2019. It tested FastBike Pro since August 2018 with the difference being a greater focus on professional two-wheeler services, as drivers must undergo a rigorous recruitment process, assessing their ethics and attitudes, as well as ability to ride a high-end motorbike. FastGo also provides health insurance packages worth up to VND20 million ($870) and insurance related to theft or new vehicle purchases of VND 20 million ($870) to attract drivers, especially students.

The other companies like bE Group JSC and Gojek entered the app-based motorbike service business in Vietnam in 2018. Gojek officially launched GoViet in Ho Chi Minh City in 2018. The GoViet app was offering services like GOoBike and GoSend on a trial period in some districts of Ho Chi Minh City in July 2018. After testing, GoViet expanded to Hanoi and other provinces of Vietnam.

Traditional xe om drivers are still present, especially in tourist areas. However, the app-based motorbike services dominate with more than 60 per cent of the country’s motorbike taxi market. The increasing entry of both local and international companies into the app-based motorbike services with unique promotional programmes in the Vietnamese taxi market, is likely to propel demand for app-based motorcycle ride-hailing market during the forecast period.

The ride-hailing market is a highly consolidated market with dominant players like Grab, be Group JSC, Gojek (GoViet), and FastGo in Vietnam. Grab captured more than 70 per cent of the ride-hailing market in the country during 2019.

The biggest threat to Grab in the future may come from be, the latest local player in the Vietnamese ride-hailing market. The company asserted that it was able to drum up hundreds of millions of dollars in local investment. Be has another ace up its sleeve – it is registered as a transportation service, not just as a tech company. This may make all the difference with the implementation of the new decree in the future.

GoViet partnered up with local firms and focused on the two-wheel bike-hailing market – which are the two factors that drove the company to gain around 20 per cent of the two-wheel ride-sharing market in centres like Ho Chi Minh City. Additionally, the company is yet to foray into the four-wheel ride-sharing segment in Vietnam.