The battle among app-based motorbike taxis

Mai Linh group, a well known taxi firm, has officially joined the app-based motorbike taxi market with its Mai Linh Bike service provided in HCMC, Hanoi and Da Nang, after one month of trial.

Vinasun, another big player in the taxi market, has also announced it will expand its business by providing motorbike taxi service via apps.

Both Mai Linh and Vinasun are traditional taxi brands which have suffered heavily because of Uber and Grab.

Their decision to join the hi-tech motorbike taxi market, which is dominated by Uber and Grab, is believed to be an important step to regain passenger market share.

However, they have been warned that it will be not easy to defeat Uber and Grab if the they don’t have reasonable strategies.

Mai Linh has decided to focus on pricing.

“Adjusting service fees is not our goal. What we strive to is serve clients better and better,” said Ho Huy, chair of Mai Linh, affirming that the service fee won’t change in rush hours or unfavorable weather conditions.

However, analysts commented that in the motorbike taxi market price is not the most important factor which determines market share.

With service fees at low levels, between VND3,800 and VND5,500 per kilometer, passengers do not care about the differences in fees offered by taxi firms. Instead, the interactions between drivers and passengers and the convenience of apps are more important.

Taxi firms have a large staff of drivers which allows the firms to have broad coverage.

Analysts noted that the majority of drivers who registered to become partners of Mai Linh on November 20 were partners of Uber and Grab as well.

This shows that with low barriers to join or withdraw from the market, the workers tend to move within a short time. As a result, taxi firms will always have to offer significant preferences to drivers to retain them.

Most drivers who have registered to work for Mai Linh Bike are still partners of Uber and Grab. They continue to work with Mai Linh because they are attracted by the initial benefits.

“I’m working for many firms at the same time. I will work for firms which offer bigger bonuses. It depends on firms’ policies at different moments,” said a GrabBike driver, 40.

Local newspapers cited a report of the Asia Pacific Securities JSC (APEC Securities) as showing that the Vietnamese taxi market has great potential with the annual forecasted growth rate of more than 10 percent.

Thanh Lich / VietnamNet