Vietnamese prosecutors side with local player, classify Grab as a taxi company

Photo credit: Grab

Grab has suffered a setback in its legal dispute with local taxi company Vinasun in Vietnam.

Prosecutors in Ho Chi Minh City recommended that the ride-hailing firm should be considered as a “taxi or transportation” company when assessing its position in the local transportation market.

Grab said in a statement that it “strongly disagrees” with this assessment and that the power to determine what type of business it is lies with Vietnam’s Ministry of Transport rather than with the courts.

The Ministry of Transport approved Grab’s application to run a pilot project of its service for “managing and connecting under-contract passenger transportation” in 2016. The ride-hailing firm suggests that giving the approval was tantamount to accepting that it’s not a taxi company.

“The review and evaluation of the transport business activities under the pilot project have been concluded many times by the executive agencies that these are not transport and taxi business activities,” said Grab in its statement. “We also trust that the court will give deference to the executive branch and will not reassess such conclusions.”

While the court is due to issue its final verdict next week, the recommended ruling from state prosecutors is a cause for concern for the company.

Vinasun sued Grab and Uber in May 2017, claiming that the two ride-hailing apps had cost it US$1.75 million in lost profits between January 2016 and June last year due to anti-competitive practices. Vinasun dropped Uber from the suit in August 2017. Grab acquired Uber’s regional operations earlier this year.

Incumbent taxi companies across the world have sought to challenge the entry of ride-hailing apps on the basis of unfair competition. Ride-hailing firms argue that they are technology platforms rather than traditional transport operators, and shouldn’t be considered as directly competing with taxi firms.

Currency converted from Vietnamese dong. Rate: US$1 = VND 23428.81