With Grab buying Uber, can Vietnamese firms compete?

Grab’s acquisition of Uber opens the door for Vietnamese businesses to enter the ride-sharing market, said Khuat Viet Hung, vice chairman of the Vietnam National Safety Traffic Committee.- Photo vov.vn

Speaking at a seminar titled “Grab’s acquisition of Uber: What are the opportunities for Vietnamese companies?” held in Hanoi on Friday, Hung noted that Uber was unknown seven and eight years ago, and that when Uber entered Vietnam, no one had heard of Grab.

“When there appears a ‘giant’ in the market, we often feel anxious, but I think that Grab buying Uber is really an opportunity for Vietnamese businesses,” he said.

Grab has officially announced that it has completed the acquisition of Uber’s business in Southeast Asia.

After the merger, Uber will hold a 27.5 per cent stake in Grab, while Uber’s CEO will join Grab’s management board.

Uber emailed an official announcement to all its customers about the transfer of the entire customer system in Vietnam to Grab beginning on April 8 and recommended customers download the Grab application.

Grab’s success in Southeast Asia is a lively example for businesses in the region, including in Vietnam, Hung said.

"There are no opportunities without challenges, but I think the current chances are clearer now. The story of Grab really encourages the creativity of Vietnamese enterprises in conquering the local market and even reaching out to other countries," said Hung.

Nguyen Cong Hung, chairman of the Hanoi Taxi Association, said that before entering Vietnam, Uber and Grab studied the country’s laws to find loopholes to increase their advantages.

"Grab and Uber used huge capital to take over the market. Initially, they created applications to attract consumers with big promotional programmes, which traditional taxis could not afford because they have to pay higher taxes," said the chairman.

He also said that as soon as Uber and Grab arrived in Vietnam, traditional taxis has learned the technology and created their own car-hailing applications and acknowledged it is also the responsibility of Vietnamese traditional taxi businesses to meet competition with innovation.

The chairman said that the association has proposed to build a taxi booking centre of the Hanoi Taxi Association and is ordering a software company to design it.

This would be a common platform for all taxi firms in Hanoi, helping everyone who comes to Hanoi choose taxies depending on the brand or price displayed.

The association wants to create equality and fairness in business and the basis of evaluation is the quality of service, the chairman said.