In 2013, after leaving Mai Linh taxi, Mr. Nguyen Ngoc Dong decided to start Lado Taxi with no capital. When the COVID-19 pandemic ended and the company was exhausted, he took another gamble with electric taxis to save the business. Today, Lado Taxi has the largest market share in Duc Trong district, especially, and Lam Dong province in general.
We had an interesting conversation with Lado Taxi CEO Nguyen Ngoc Dong.
– How did you get into university, Mr. Dong? I’d like to know about the student life of the owner of 1,200 taxis.
In 1995, I received the admission letter from the University of Economics in Ho Chi Minh City. However, due to financial difficulties, I couldn’t afford the tuition fee. My parents told me that whether I went to university or stayed at home, I would end up working in agriculture like my siblings.
Determined to pursue higher education, I decided to grow tomatoes to earn money for my studies. That year, the tomato crop was abundant, and the price was high. After selling the tomatoes, I bought more than 10 taels of gold. I left the gold with my parents as capital and only took a small amount with me to Saigon for my studies.
During my student life, I rented a room and worked various jobs to make a living, from riding a cyclo to construction work and electrical repairs. I was willing to take on any task without hesitation.
In 1999, I graduated from university and worked as a sales employee for several consumer goods companies such as Nutifood, Cô gái Hà Lan, Dulux paint, Bitis footwear, and URC – the producer of C2 green tea…
– How did you become involved in the taxi industry?
In November 2008, I entered the taxi industry by chance. After working in different jobs in Ho Chi Minh City, I decided to return to Lam Dong to be closer to my aging parents.
I wanted to become a manager to gain experience in personnel management and financial administration. Fortunately, I was hired as the Director of Mai Linh Duc Trong, a branch of the Mai Linh Group.
I underwent about a month of training and worked there for six months, during which I grew to love the taxi industry. I enjoyed studying the industry’s data and the movement of the wheels.
In 2009, Mai Linh underwent a significant transformation. Some small units with 10-15 taxis, where the directors could not raise enough capital or make sufficient investments, had to either resign or become a shift exchange station. While my colleagues at Mai Linh Duc Trong thought the company might not be able to survive, I was determined to make it work.
Within three months, I mobilized capital from various sources and purchased 55 taxis. When I took over the management of Mai Linh Duc Trong, the company’s total assets were only 841 million VND. However, after two years, the company’s total assets reached 34 billion VND.
The leaders of the Mai Linh Group acknowledged my contributions and invited me to become the Deputy General Director in charge of business. However, I declined because I didn’t want to be a “deputy.”
Mai Linh Duc Trong was later renamed Mai Linh Lam Dong and became the “superior” of many member units in the province. In 2013, I resigned from the Mai Linh Group.
– What was the state of the taxi market at that time, Mr. Dong?
Back then, the taxi industry was not very competitive. In Lam Dong, Mai Linh seemed to have a monopoly, with over 300 taxis, tens of times more than other companies. Some other companies, such as Phuong Trang and Thang Loi, also operated taxis, but they couldn’t compete with Mai Linh and eventually withdrew. Knowing their limitations, Phuong Trang focused on long-distance transportation and left the taxi market to Mai Linh.
– After leaving Mai Linh, you didn’t have any capital, yet you still wanted to start your own taxi company. Wasn’t that a reckless decision?
Yes, at that time, I had nothing but recklessness. I took my documents and applied for a business license. I borrowed money from my relatives and other sources, amounting to 3.2 billion VND, including 400 million VND in hot money.
At that time, each Hyundai i10 taxi cost 340 million VND. If I bought 20 cars, it would cost 6.8 billion VND. I contacted the Hyundai dealership to arrange the purchase of 20 cars with an installment payment plan.
The owner of the Hyundai dealership in Nha Trang came to Duc Trong and saw my tiny house and small workshop. However, after finishing a bowl of instant noodles, he agreed to have his staff deliver 20 i10 taxis to me, even though we didn’t have a bank guarantee or any other collateral. He trusted my credibility.
On July 8, 2013, just over a month after leaving Mai Linh, I officially inaugurated my new company, and the Lado Taxi brand was born.
– Did difficulties arise as soon as Lado Taxi entered the market?
After a few months of operating the 20 taxis, the company needed a bank loan to pay the remaining 50% of the car purchase cost. However, the banks refused to lend us money because the company didn’t have any financial reports.
– How did your company perform in its early days, Mr. Dong?
Although we were newcomers, we quickly gained market share by providing excellent service. Our taxis were equipped with free Wi-Fi, bottled water, snacks, cold towels, and our fares were 20% lower than those of our competitors. Both children and the elderly enjoyed the novel experience of riding in Lado Taxis.
At that time, our average revenue per car reached 1.6-1.7 million VND per day, while other companies’ revenue decreased significantly, from about 1.1 million VND per day to 500-600 thousand VND per day.
Every day, the company’s revenue ranged from 30 to 40 million VND, which surprised my wife. She thought that with 50 cars, our family would live comfortably. I told her that if we were going to wish for something, we should wish for 500 cars, and if we were going to wish, we should wish big.
When Lado Taxi started to take off, a competitor threatened to bring dozens of cars to Duc Trong to “swallow up” our company. However, I just acknowledged their statement and continued with my work. In the fourth month of operation, I bought 20 more taxis.
– Was your company like a kite soaring in the wind during that period?
In 2014, a leader of Sacombank Leasing (a financial leasing company of Sacombank) visited our small and dilapidated company and decided to lend us a maximum of 75 billion VND at a very favorable interest rate. With this financial leverage, we bought taxis like buying instant noodles, and by the end of that year, Lado Taxi had nearly 250 cars.
We expanded so quickly that some funny incidents occurred. Our cars were parked everywhere, and sometimes we had to search hard to find one. At that time, we had plenty of money, and we built a spacious house and headquarters. Many people said that we were luckier than lottery winners, and I agreed.
By 2015, we had 450 taxis and were ready to expand further. However, the Lam Dong provincial government issued a document requesting companies to limit fleet expansion due to overloaded infrastructure. In subsequent years, we only added 40-50 cars per year, following the province’s guidelines. By 2019, the company had 568 vehicles.
We continued to expand to Long Khanh city, Dong Nai province. As our competitors there were weak, Lado Taxi quickly dominated the market and operated 100 cars. We also entered the Binh Dinh market and other markets such as Binh Thuan, Phu Yen, and Ba Ria – Vung Tau.
– Why did you decide to switch from gasoline to electric taxis in 2022 when your gasoline taxi business was doing well?
After more than two years of struggling due to the COVID-19 pandemic, Lado Taxi was financially exhausted. The bank forced us to repay many debts. We had to sell land, houses, and cars to pay off the loans.
After settling the debts, we decided to change the type of vehicle we used, opting for electric cars. I had been thinking about using electric cars since 2016 because I saw their popularity in China. I believed that one day, Vietnam would also move in that direction.
I noticed that electricity prices only increased a few times a year, while gasoline prices fluctuated constantly. As the taxi business heavily depended on fuel costs, I shared my idea of using electric cars, but my staff laughed and asked where I would find electric cars.
In early 2022, I heard that Vinfast was about to launch the VF e34 electric car, with a price of 658 million VND per car, or 538 million VND for those who booked early. I decided to book as many as possible to get the cars quickly, even though the company was facing difficulties.
At that time, I bought all the booking slots I could find. Initially, the booking fee was only 10 million VND, but later it increased to 20-30 million VND. I even flew to Hanoi to buy booking slots from people there.
– Do you consider switching to electric taxis a significant gamble in your life?
Yes, it was a gamble. However, if we didn’t take the risk, we would fail anyway, so I decided to give it a try. If we didn’t change and transform, we would decline.
When my staff saw my determination to switch to electric taxis, they thought I was crazy. But if it were easy, someone else would have done it.
– What challenges did you face when you first bought electric cars?
The biggest challenge was borrowing capital to buy the cars. Banks were still cautious about electric vehicles and feared the risks. Fortunately, a financial investment fund in Ho Chi Minh City agreed to lend Lado Taxi money to buy the first five VF e34 electric cars. With this contract, other banks were also willing to lend us money.
When the company had 16 electric cars, we prioritized using them for the Lien Khuong – Da Lat airport route to showcase the cars to domestic and international passengers. People and tourists arriving at the airport would see many electric cars parked there. Some passengers took photos and videos with the cars, helping spread the image of Lado Taxi. Many foreign tourists were willing to wait for hours to ride in an electric taxi.
– Have electric cars helped you revive the company?
By the end of 2022, we had purchased a total of 100 electric cars. These cars helped me and the company overcome difficulties. I believe that when we are desperate but refuse to give up, help will come.
When I decided to switch to electric taxis, the most challenging issue was the lack of charging stations. Fortunately, a company specializing in solar energy offered to collaborate and support us. They installed solar panels on our roofs and built charging stations for our electric cars. We pioneered the construction of charging stations to solve the energy problem for hundreds of vehicles.
Compared to gasoline cars, electric cars reduced fuel costs by 50%, leading to higher profits. Each electric car only needed to generate 1 million VND per day for the company to break even. A revenue of 1.3-1.4 million VND per day would result in a good profit.
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