The e-hailing market is widely open with the appearance of many new names

In the taxi market, the battle between ride-hailing and traditional taxis is switching to a battle between foreign and Vietnamese e-hailing apps.

A lawyer noted that the ride hailing sector is now in a ‘transitional period’ as Decision 24 has expired, while the amended decree to replace Decree 86 has not been promulgated, thus generating legal loopholes in the e-hailing industry.

To date, after arguments lasting for two to three years, it is still unclear what Grab is – a transport firm or just a technological broker that connect drivers and passengers.

Nguyen Cong Hung, chair of the Hanoi Taxi Association, has been sticking to his opinion that Grab and Go-Viet are transportation firms, not brokers, and must follow regulations set for transport service providers.

A representative of BE said that BE also runs on a model similar to Grab’s, but the difference is that BE has registered to provide transport services.

Do Hoa, a consultant, said this would help the state’s management and avoid arguments about identification.

The Vietnamese e-hailing market is wide open with the appearance of new names such as Vato, FastGo and Aber, and apps developed by traditional taxi alliances.

The merger of Uber with Grab last March brought a great advantage to Grab as it has become the biggest player in the e-hailing market.

Hoa said this is seen as opportunity and challenge for startups like BE.

“The market is no longer a ‘blue ocean’ with few rivals, but it has turned red with many players,” Hoa said.

The story of Vato shows that if Vietnamese startups cannot prepare resources, they will lag behind foreigners in the race. 

Foreign firms, with powerful financial capability, may accept losses in the first years of operation to lure customers.

Hoa believes that competition among e-hailing service providers, by nature, is a ‘price war’, in which those who have more capital will be the winners. As for BE, the firm is expected to have trillions of dong worth of capital from its founders.

Tran Thanh Hai, CEO of BE Group, said that BE would offer preferences to passengers, but denied that it would join the price war.

Some e-hailing apps, in an effort to attract more customers, are offering zero-dong trips to passengers. Some analysts believe that the losses from the zero-dong trips will be offset by fees 2-3 times higher in rush hours.

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Kim Chi