Delivery drivers wait for food delivery at a restaurant in Hanoi. (Photo: VNA) Theissues were discussed at a recent seminar, “Competitive solution for theride-hailing market in the new normal period,“ organised by the VietnamCompetition and Consumer Authority and the project for policy improvement andcapacity building on competition conducted by the Japan InternationalCooperation Agency (JICA).
Havingbeen present in Vietnam since 2014, Vietnam’s car-hailing service market hasseen a boom with more than 20 different platforms. There are now 90,000 taxisthat have contract-based car signs on the front windscreen and logo of thefirms.
Itis reported that Vietnam’s ride-hailing service market earned a revenue of 2.4billion USD in 2021 and reached an average growth rate of 30-35 percent annuallysince 2015. The growth rate of users who use ride-hailing apps berth secondplace after the electronics e-commerce market in the country.
Between2020 - 2021, during the fourth wave of the COVID-19 pandemic, social distancingmeasures sometimes forced ride-hailing applications to freeze completely.However, ride-hailing platforms have been expanded with services such as onlinefood and good delivery and electronic payment due to the change in habits ofVietnamese consumers, so food delivery services have become increasinglypopular especially mobile delivery apps.
Accordingto Statista (a German company specialising in market and consumer data), thetotal market share of the three largest ride-hailing companies in Vietnam, Grab,Gojek and Be, reached nearly 99 percent in 2020.
Expertsat the seminar said that competition on fees and service quality and diversifiedplatforms offered certain benefits for users, including riders and drivers.
Theysaid users would enjoy more benefits and users’ interests would be more secure,noting that this would create challenges and great pressure for potentialcompanies that want to join this market.
TranPhuong Lan, an official of the Vietnam Competition and Consumer Authority, saidfinance was the most significant barrier for the ride-hailing market. It wastough for businesses with little capital to survive and maintain their businessin the ride-hailing industry.
Topromote competition in the ride-hailing industry, Nguyen Huu Tuan, Director ofthe E-commerce Operation Management Department under the Ministry of Industryand Trade, said it was necessary to create a healthy competitive, favourableand fair environment between traditional taxis and technology taxis.
Tuan saidit needed to encourage the digital transformation process and create favourableconditions on loans for newcomers to enter the market by offering them tax andonline payment incentives.
Inaddition, it is necessary to strengthen inspection and examination to ensurethat all businesses comply with competition law.
DinhVan Minh, an official of the Ministry of Transport, said the Government issuedDecree No. 10/2020/NĐ-CP on January 17, 2020, regulating automobiletransport business and conditions for conducting automobile transport business,replacing Decree No. 86/2014/NĐ-CP, which was a boost for transport businesses.
Decree10 officially took effect from April 1, 2020. It ended the pilot application ofride-hailing software for the passenger transport business with e-contracts,which had been applied for more than four years.
Withthe simplification of investment conditions for transport services for traditionaland contract-based taxis, Decree 10 is expected to create favourable,transparent, healthy and fair competition for transport companies.
Lansaid businesses needed to be more proactive and enhance the application ofinformation technology in their business activities./.
VNA
