Grab and Vietnam taxi firm agree to settle competition case out of court

Grab and Vietnamese taxi firm Vinasun have agreed to settle their unfair competition dispute out of court, potentially bringing the 18-month case to an end.

Grab confirmed to Tech in Asia that the court has not dismissed the case, but has directed the parties to seek an out-of-court settlement, which both have agreed to.

The court has given Grab and Vinasun “no more than a month to discuss and come to a mutually beneficial solution before the judge makes the final decision for the likely dismissal of the case,” a Grab spokesperson told Tech in Asia.

Photo credit: Grab

Vinasun sued Grab and Uber in a Ho Chi Minh City court in May 2017, accusing the ride-hailing apps of unfair business practices that had cost it US$1.76 million in lost profits over the preceding 12 months.

Vinasun argued that Grab and Uber – the latter was dropped from the suit in August 2017, and later merged its regional operations with Grab – should be classified as “taxi or transportation” companies under local regulations, rather than platforms “managing and connecting under-contract passenger transportation.”

It’s a difference of opinion that ride-hailing firms have faced the world over. Because they claim to be tech companies running what are effectively on-demand marketplaces, they are not typically regulated under the same framework as traditional transportation providers like taxi companies. This, the traditional providers argue, allows ride-hailing apps to compete against them on an unlevel playing field.

We are optimistic that both Grab and Vinasun will ultimately find a win-win solution.

Things looked a little sketchy for Grab last month when Ho Chi Minh City prosecutors recommended that the court consider it as a taxi company when making its final decision. This was despite the fact that Vietnam’s Ministry of Transport approved Grab’s proposal to run a pilot ride-hailing service in 2016 – an action that Grab claims was tantamount to the government recognizing it as a transportation network company, rather than a taxi company.

In a statement, Jerry Lim, country head of Grab Vietnam, said that today’s agreement is a “positive outcome for everyone” that is “most beneficial for the people of Vietnam and in line with the government’s commitment to leverage […] digital opportunities.”

“We also acknowledge Vinasun’s response to our call to work together to add greater value to the transportation industry,” he added. “We are optimistic that both Grab and Vinasun will ultimately find a win-win solution that can serve the best interests of the people of Vietnam.”

Currency converted from Vietnamese dong. Rate: US$1 = VND 23264.74