Clash of buisness models in Vietnam: traditional vs. contemporary
Ride-hailing apps Uber and Grab taking away the profit of Vietnam’s biggest taxi company
Vinasun, the biggest taxi company in Vietnam, is forecasting to have 20% less profit compared to previous year, due to incurred high costs, and coupled with increasing competition from ride-hailing apps Grab and Uber. This is a first decrease in profit after growing 5% and 40% in last two years, respectively.
In the first quarter of 2016, Vinasun was more than 73% short of its planned profit. To make matters worse, these months are perceived as peak season for the taxi industry due to a number of holidays.
In order to strengthen its competitive position, Vinasun is planning to reduce fares, add new vehicles on the streets and ease payment methods for its customers. Another move from the company was to create its own mobile app, similar to the ones of Uber and Grab.
We have already seen that ride-hailing services are already changing the rules of the game in cities across the US. Is Vietnam going to see a similar pattern?
Original article