Tech-based taxi game: attractive but not easy to play
Since the inception of Uber of the U.S and Malaysia’s Grab in the Vietnamese market in the period 2012-2013, many tech-based taxi brands have entered the market share race. But very few can survive due to Vietnamese user habits and other reasons.
Domestic brands
On March 21, GSM (Green-Smart-Mobility) JSC, the electric car and motorbike rental and taxi service arm of VinFast, a subsidiary of private conglomerate Vingroup, and ride hailer Be Group signed an agreement to team up to utilize electric vehicles in ride-hailing services.
Per the agreement, GSM will invest in Be Group to help the latter grow into a multi-service platform, support Be Group drivers to switch to electric vehicles conveniently, and improve service quality.
This information immediately stirred public opinion, because this is the cooperation of two rare Vietnamese tech-based taxi brands in the market, amid the expansion of Grab and Gojek from Indonesia.

GSM taxis begin to run on Hanoi streets on April 14, 2023. Photo courtesy of Vingroup.
Be Group launched its Be app in 2019, which has over 20 million downloads and currently serves over 10 million transactions monthly. Now available in 28 provinces, Be is the best growing application of Vietnam in the field of tech-based transportation.
Before Be, many domestic transport firms had built tech-based models to compete with Grab, but all failed.
Debuted in September 2019, VATO of FUTA Bus Lines was expected to be a Vietnamese application that could compete fairly with Grab, thanks to FUTA's customer ecosystem and reputation. However, after four years of operation, the platform has failed to meet expectations.
Vinasun and Mai Linh, the two "big faces" in the traditional taxi industry, also joined the tech-based car hailing game with a strategy to attract customers via their own mobile apps. However, until now, users only position these two firms as traditional taxi service providers.
Grab's success and GSM's prospects
The tech-based taxi game in the 100-million-strong market, at first glance, is very attractive as there is not much competition among players. However, many experts think that this game is difficult to play.
Any brand that wants to join this game is determined to "pour money" to surpass Grab and Gojek, as Be has done over the past time. However, Grab's over-10-year presence in Vietnam has not come easy. This giant had nearly reset the game in Vietnam.
The Malaysian brand was the first to bring the "tech-based taxi" to Vietnam, in February 2014.
Four months later, Uber, a ride-hailing application founded in 2009 in the U.S., entered the Vietnamese market, which was considered the most lucrative in Southeast Asia at that time.
However, after four years, on March 26, 2018, Grab and Uber simultaneously announced that the former had completed the procedures to acquire the latter’s market share in Southeast Asia. In return, Uber got a 27.5% stake of Grab. On April 8 the same year, Uber officially withdrew from the Southeast Asian market.
Since then, Grab began to dominate the Vietnamese market in particular and Southeast Asia in general, before facing competition from Gojek. However, this brand still has a long way to go to compete with Grab.
Grab's success in Vietnam firstly comes from its position. It had almost no competitors as domestic brands only copied operation methods and technology platforms instead of finding and fixing shortcomings of competitors, or did not have enough financial potential as well as thorough development strategies for investment.
This brand has also been growing too fast, with a multi-service platform integrated right on the mobile application, not only for car booking. This made other brands “short of breath” since they lacked advance preparation.
On the other hand, Grab once excluded Uber from the Southeast Asian playing field just because the Western brand did not understand the characteristics of two-wheelers, which Grab held in the palm of its hands thanks to hailing from the Malaysian cradle.
But Uber's "shadow" still hovered over Grab when the former's CEO Dara Khosrowshahi joined Grab's leadership in a deal that grabbed the headlines in 2018. So it is not easy for other taxi brands to surpass strong Grab, with the backing of Uber, the world's leading tech-based car hailing application.
But this does not mean that GSM will be left behind. Expectations for the growth of this brand are very clear.
Commenting on the GSM-Be deal, Vo Quoc Binh, general director of Binh Minh Group, which specializes in trading used cars, said this is an opportunity for both Be and VinFast.
"Actually, this is a strategy that I think is an exit for VinFast at this time," he said.
According to Binh, with Be's current multi-service platform, plus new products, GSM has a higher chance for success than the prematurely dead VATO, even though FUTA boasts a large transportation ecosystem.
"It’s good to have another player to join the game with Grab. We support GSM, given it will not just do that to release inventory and get cash flow from banks to balance the revenue and solve other problems,” he noted.
GSM officially put into use Vietnam’s first taxi service using electric cars in Hanoi on Friday. Customers can order Xanh SM taxi via its hotline at 19002088 or the Xanh SM taxi application that is available on the App Store and Google Play Store. From May, they can call Xanh SM taxi through the BeVinFast service on the multi-service consumer platform Be.
All EVs in GSM's fleet are produced by VinFast. The firm provides two kinds of service, the standard GreenCar using VinFast VF e34 model, and the high-end LuxuryCar using VinFast VF 8. Initially, GSM's EV fleet comprises 500 VF e34 cars and 100 VF 8 cars in Hanoi. In the future, it will add VinFast VF 5 Plus model to its GreenCar fleet.
As scheduled, GSM will launch its taxi services in Ho Chi Minh City also in April and expand its service to at least five cities and provinces within this year.
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