Vingroup founder’s EV play revs up Vietnam’s ride-hailing race

Image credit: Timmy Loen

Just when the ride-hailing battle in Vietnam appeared to be over, it gets a game-changing development.

After nine years operating in the country, Grab has become so ubiquitous that its drivers are almost unavoidable in major cities. However, a new competitor has emerged that could not be ignored.

Pham Nhat Vuong, the Vietnamese billionaire behind local conglomerate Vingroup and electric vehicle manufacturer VinFast, will officially roll out his new EV ride-hailing service called Green SM Taxi in the capital city of Hanoi starting tomorrow.

Green SM Taxi is part of Green and Smart Mobility (GSM), of which the Vingroup chairman owns a 95% stake. Unsurprisingly, the EV ride-hailer will exclusively use VinFast cars – specifically the VF e34, VF8, and VF5 Plus models – for the first phase of its operations.

In an email interview with Tech in Asia, GSM CEO Nguyen Van Thanh did not comment on whether or not GSM aims to become a super app, saying that it wants to “focus on providing electric taxi and EV rental services” at the moment.

Recently, GSM signed rental deals with Ahamove, the on-demand delivery service of Temasek-backed Scommerce, as well as with a local traditional taxi brand. Most notably, it has also invested an undisclosed amount in Be Group, Grab’s biggest rival in Vietnam.

See also: Indonesia courts Tesla but faces EV roadblocks

This is not the first ride-hailing rodeo that Vingroup has ventured into. In 2019, VinFast had signed a deal with FastGo – considered a notable local challenger to Grab at that point – but it couldn’t take off. A slew of other homegrown ride-hailing companies met the same fate.

However, at that time, VinFast hadn’t transitioned into exclusively producing EVs. Will it make a difference this time around?

Is EV the road that must be taken?

The biggest selling point in the partnership between GSM and Be Group is the EV component. But that doesn’t mean the local market is ready for this development, an industry analyst tells Tech in Asia.

“Ten thousand EV cars is a good number, but to what extent the market can absorb it is another story,” the person adds. “When drivers don’t get enough rides, they will abandon the platform.”

GSM says its cars are painted in cyan blue – a combination of green (the environment) and blue (technology). / Photo credit: GSM

The local factor

It’s not David vs. Goliath