Alarm bells ringing for Vietnamese taxi giant as thousands of more drivers quit

Vietnam’s biggest taxi company Vinasun said it lost 2,000 drivers during the third quarter of this year after 8,000 quit their jobs in the first half due to harsh competition from foreign ride-hailing firms.

Its revenue in the first nine months reached only 58 percent of this year's target while its net profit in the third quarter dropped 50 percent over the same period last year to VND47 billion ($2 million).

Vinasun has set a revenue target of more than VND4.25 trillion ($187.3 million) and gross profit goal of VND205 billion for this year, down 10.6 percent and 34 percent respectively against what it earned last year.

The company blamed its driver losses and negative bottom line on fierce competition from ride-hailing companies Uber and Grab as well as higher fuel prices and increasing minimum wages.

In a letter sent to the prime minister in May, the firm said “unhealthy competition” from the U.S.-based Uber and Malaysia-based Grab had driven its business crazy.

The same story can be told of Mai Linh, another major local taxi firm.

Mai Linh lost 6,000 drivers in the first half of this year, equivalent to 20 percent of its employees, according to a company report.

Its business results did not read much better during the same period, with revenue falling more than 5 percent on-year to VND1.72 trillion ($75.8 million).

In all, Mai Linh's taxi business hemorrhaged VND47.5 billion, twice as much as last year, the company said.

In a letter sent to the company’s shareholders early this year, chairman Ho Huy also pointed the finger at Uber and Grab, saying the rapid growth of the two ride-hailing firms in Hanoi and Saigon had made the competition fiercer than ever, especially when they are being offered preferential treatment.

However, such finger-pointing has received little support from the public, with many passengers saying they were already unhappy with poor and unreliable services provided by both Vinasun and Mai Linh, which are now referred to as “traditional taxis” to distinguish them from ride-hailing services.

In its latest attempt to win back customers, Vinasun last month started to let its passengers book rides by messaging the firm on Facebook. The chatbot allows passengers to see the fare, preventing drivers from overcharging them by driving around, and is expected to reduce the 205,000 booking calls the company receives every month.

In August, Vinasun spent VND27 billion acquiring Vinasa, the top taxi firm in the southern cities and provinces of Dong Thap, Vinh Long, Can Tho and An Giang.