The Battle for Survival: A Small Ride-Hailing App’s Struggle

Since Gojek’s exit from the Vietnamese market, Grab has maintained its dominance with over 40% market share. Be trails with approximately 30%, while Xanh SM, backed by billionaire Pham Nhat Vuong, is expanding with around 20%. This leaves just 10% of the market for other players, including traditional taxi companies like Vinasun and Mai Linh, as well as smaller apps such as Tada, Emddi, and GV Taxi.

A Fierce Battle for Market Share

Even before the COVID-19 pandemic, traditional taxi companies had begun adopting app-based booking alongside their conventional calling and street-hail services. However, it took time for their apps to become smooth-running, and they have only recently started functioning optimally.

Vinasun’s consolidated financial report for Q3 2024 reveals a 21% decline in revenue compared to the previous year, amounting to VND 246 billion. This is attributed to the intense competition in the ride-hailing market. According to Vinasun’s leadership, the introduction of app-based booking has helped the company retain its market share. Currently, app bookings account for nearly 40% of their total taxi service usage.

Tada, a Singaporean app with a minuscule market share in Vietnam, is doing everything it can to stay afloat. Present in the market since early 2019, Tada initially offered only four-wheeler rides but later expanded to include two-wheeler services. The company even had to temporarily suspend operations for about two years before returning to the market in 2022. To gain a foothold, Tada opted not to charge drivers any commission, effectively operating at a loss. However, they generate revenue from partners who lease, sell, repair, and insure vehicles. Additionally, Tada is a blockchain technology enterprise, and this is their primary revenue stream.

GV Taxi, another ride-hailing app, offers a range of services, including motorbike, taxi, truck, and bus bookings. Yet, after four years in the market, it remains relatively unknown. To turn things around, GV Taxi has embarked on a collaboration spree, partnering with local cooperatives and expanding its presence in cities like Da Lat and Tay Ninh. This strategy is well-suited for a small player aiming to consolidate its market share before venturing into larger cities.

Emddi, another player in this space, has developed a unique approach with its ride-hailing software platform. This platform serves taxi, motorbike, truck, and contract car companies, as well as delivery services in provinces and cities. By staying out of the market’s direct operations and fare-setting, Emddi avoids the risks and losses associated with them.

Costly Lessons Learned

According to a Tada representative, despite their small market share, they are confident in their ability to remain in the market without engaging in a money-burning battle. Tada plans to expand beyond Ho Chi Minh City into neighboring provinces, providing additional income opportunities for their driver partners. They also acknowledge that Gojek’s departure has benefited them. “We are confident that with fares 10-15% lower than our competitors, we will attract more customers,” the Tada representative added.

Nguyen Chi Luan, former CEO of Go-ixe, shared his experience of losing over VND 40 billion in just two years (2017-2018) while trying to compete with larger players. “No matter what we did, our competitor always countered. When they realized we had obtained permits in certain localities, they immediately offered promotions there. We tried to match those promotions, but our funds soon dried up,” Mr. Luan recounted.

Huynh Le Phu Phong, former CEO of Aber, a ride-hailing app that operated from 2018 to 2019, shared a similar story. Aber offered a range of services, including taxi, motorbike, and delivery, in four provinces and cities. They even had plans to expand into the trucking business. However, insufficient capital and a lack of agreement among the board members regarding investment strategies ultimately led to their demise.