Ride hailing service in vietnam market and its impacts on travel behavior of local people001

After launch, Ride-hailing service RHS hasimmediately redefined the individual public transport industry taxi or motorcycle-taxi in some South East Asia countries such as Vietnam, Indone

After 2 years at the Vietnam-Japan university, I had many great experiences,new friends, helpful knowledge, and above all, I learned at the international studyenvironment of the top university in Vietnam

First of all, I would like to express my endless thanks and gratefulness to myresearch supervisor Professor Hironori Kato and Doctor Phan Le Binh for his kindsupport and continuous advice during research time Their encouragement andcomments had significantly enriched and improved my research process Withouttheir motivation and instructions, my research would have been impossible to bedone

Furthermore, from bottom of my heart, I would like to thanks Program Director

of Infrastructure Engineering Program of Vietnam-Japan University (VJU), ProfNguyen Dinh Duc who always has encouraged and deeply care about me;

As of last, my deepest thanks come to the rest of the teachers and staff ofVietnam Japan University Their kindly help and guidance has inspired me andhelped me to overcome the challenges which I faced during the period of study atVietnam Japan University

Although I tried to complete this research by all my effort, however, there arestill many errors and shortcomings for many reasons I look forward to receivingcomments and suggestions which could present me with new sources of inspiration as

I develop in my ability to research and learn

Thank you sincerely!

Nguyen Danh Minh

TABLE OF CONTENTS

ACKNOWLEDGMENT i

TABLE OF CONTENTS ii

LIST OF FIGURES iv

LIST OF TABLES v

LIST OF ABBREVIATIONS vi

ABSTRACT 1

CHAPTER 1 INTRODUCTION 2

CHAPTER 2 LITERATURE REVIEW 5

2.1 Grab company 5

2.2 Some key finding from studies about ride hailing service in South East Asia countries ‐hailing service in South East Asia countries 6

2.3 Some key finding from studies about ride hailing service in developed countries ‐hailing service in South East Asia countries 7

CHAPTER 3 METHODOLOGY 9

CHAPTER 4 INTRODUCING OF RHS, LEGAL MECHANISM AND CONTROVERSY IN OPERATION OF GRABCAR IN VIETNAM 10

4.1 The history of introducing RHS in Vietnam 10

4.2 Legal mechanism for operation of GrabCar service in Vietnam 11

4.3 Controversy among stakeholders regarding operation of GrabCar service 12

4.3.1 Lawsuit between traditional taxi and Grab 12

4.3.2 Opinions of stakeholders relating operation of GrabCar service in Vietnam 15

4.4 Conclusion 18

CHAPTER 5 THE IMPACT OF RHS ON LOCAL PEOPLE AND DYNAMIC MOVEMENTS OF RIDE‐hailing service in South East Asia countries HAILING CAR 19

5.1 Survey description 19

5.1.1 Data collection by group discussion (qualitative interviews) 19

5.1.2 Data collection by Grab app 21

5.2 Group discussion (qualitative interviews) 25

5.2.1 Group discussion record 25

5.2.2 Key finding 33

5.3 Dynamic characteristic of RHS car 34

5.3.1 The fluctuation of the price over time 34

5.3.2 The relationship between the availability and the waiting time 49

5.3.3 The surge pricing 52

REFERENCES 56

LIST OF FIGURES

Page

Figure 1 Traditional taxi usage change in last 12 month 3

Figure 2 History of introducing RHS in Vietnam 11

Figure 3 Allegation of Vinasun about operation of Grab 13

Figure 4 Image of the interview at VJU 19

Figure 5 The availability of ride-hailing car 21

Figure 6 The waiting time and the price of trip 21

Figure 7 The location of districts in the city 23

Figure 8 The fluctuation of the price on weekdays in zone 1 35

Figure 9 The fluctuation of the price on Saturday in zone 1 35

Figure 10 The fluctuation of the price on Sunday in zone 1 36

Figure 11 The fluctuation of the price on Monday and Wednesday in zone 2 40

Figure 12 The fluctuation of the price on Friday in zone 2 41

Figure 13 The fluctuation of the price on Saturday in zone 2 41

Figure 14 The fluctuation of the price on Sunday in zone 2 42

Figure 15 The fluctuation of the price in zone 3 48

Figure 16 The frequency of the availability in weekdays in zone 1 50

Figure 17 The frequency of the waiting time in weekdays in zone 1 50

Figure 18 The frequency of the availability in days of the week in zone 3 51

Figure 19 The frequency of the waiting time in days of the week in zone 3 51

Figure 20 The frequency of the waiting time at the peak-hour in zone 2 53

LIST OF TABLES

Page

Table 1 Information of plaintiff and defendant in lawsuit 12

Table 2 The detailed information of survey days 22

Table 3 The characteristic of zone 22

Table 4 The O-D pair 23

Table 5 The fluctuation of price between 2 time group (21h-22h) and (19h-21h) 36 Table 6 The fluctuation of price between 2 time group (22h-23h10) and (23h10-24h) 38

Table 7 The fluctuation of price between 2 time group (7h-14h) and (14h-22h) 39

Table 8 The fluctuation of price in zone 2 42

Table 9 The fluctuation of price between 2 time group (16h30-19h30) and (15h30-16h30) 43

Table 10 The fluctuation of price between 2 time group (18h-19h) and (15h30-18h) 44

Table 11 The fluctuation of price between 2 time group (22h-22h30) and (22h30-24h) 45

Table 12 The fluctuation of price between 2 time group (21h-22h10) and (19h10-21h) 46

Table 13 The fluctuation of price in zone 3 48

Table 14 The regression statistics table displays the relationship between the availability and the waiting time of zone 1 and zone 3 49

Table 15 The regression statistics table displays the relationship between the availability and the waiting time of zone 2 52

Ministry of TransportCentral business district

Ride-hailing service (RHS) is a new travel mode in urban transport system, it iscalled as the technology taxi service in Vietnam Ride-hailing is the act of requesting

a ride from a private passenger vehicle by an app on a smartphone RHS has appeared

in Vietnam from 2014, however, it has spread rapidly and affect significantly toVietnam transport market and travel habit of people Until now, there has been still nocompleted regulation for the operation of RHS in Vietnam RHS has caused bigcontroversy with the domestic taxi industry, traditional taxi companies claim thatRHS is no different from taxis, and that ride-hailing companies (RHCs) should beheld to the same operating requirements and regulations as taxi companies, includinglicensing, fare regulation, and vehicle and driver safety standards in order to maintain

an equal and fair playing field The research has also evaluated qualitatively impacts

of RHS on local people The results show that people usually use Grab for picking up/sending off their children Some people use Grab to replace their private vehicle to go

to work or use it as a paratransit mode After examining the dynamic characteristic ofthe RHS car, some interesting findings have been revealed The fluctuation of theprice of Grab depends on the demand of the market When the demand is high, theprice of the trip will high and vice versa The great fluctuation of price frequentlyhappens at the morning peak – hour (6h-9h) on weekdays when people have a highdemand for going to work On the weekend, the price frequently fluctuates widely inthe afternoon (16h30-19h), in the evening (19h-22h) and at night (22h-23h) whenpeople have a high demand for leisure purpose and going back their home Thewaiting time for a RHS car does not only depend on the number of the available cararound but also depends on the distance between the vehicle and the customer Apotential assumption also has been proposed that the algorithm of Grab appautomatically raises prices to balance between demand and supply because when badconditions happen

CHAPTER 1 INTRODUCTION

Ride-hailing also is known as technology taxi in Vietnam – is the act ofrequesting a ride from a private passenger vehicle by an app on a smartphone Thistype of system is built, managed, and operated by ride-hailing companies (RHCs),Grab (Malaysia), Uber (United States of American), or Gojek (Indonesia) are somewell-known RHCs in South East Asia countries area These RHCs serve as the brokerbetween the customer who has ride demand and the driver who possesses andoperates his/her own private vehicle After launch, Ride-hailing service (RHS) hasimmediately redefined the individual public transport industry (taxi or motorcycle-taxi in some South East Asia countries such as Vietnam, Indonesia, Thailand, andCambodia) with its user-friendly platform, which includes extra convenience, varietypayment method, completed door-to-door service, maximal reduced waiting time

RHS has appeared in Vietnam transport market in 2014 with 2 RHCs – Uberand Grab Until 4/2018, Uber sold the whole market share for Grab, stoppedproviding all services of Uber in Vietnam After Uber was taken over, Grab hasoccupied a large share of the passenger transport market Within 5 years, Grab almosthas dominated the individual public transport market in Vietnam, it has suppliedservice to a majority of metropolitan regions spanning throughout 36 provinces/citiesacross the country with 175.000 partners (drivers), has become a important portion ofurban transport and affect significantly to operation of other types of transportbusiness, especially type of traditional taxi business as well as travel behavior ofpeople According to Vietnam Parliament Television, by the end of 2017, in Hanoiand Ho Chi Minh City, the number of traditional taxi car is only 23.000, reduced

8000 vehicles compared with transportation planning, meanwhile number of Grabcar, from 0 vehicles, increased up to 37000 vehicles The frequency of ridingtraditional taxi also goes down, 61% of users confirmed that they used

traditional taxi service less frequently than a year ago (according to the survey of AsiaPlus Inc in July 2017).

Figure 1 Traditional taxi usage change in last 12 month

(Source: Asia Plus Inc on July, 2017)

Currently, there is still no completed regulation for the operation of RHS inVietnam Besides that, RHS also has been causing the big controversy amongstakeholders regarding regulatory statutes imposed on its operation

The purpose of this study is to understand the history of introducing and theoperation of RHS in Vietnam market as well as the reason of controversy based onthe review of related websites, review of related laws, and statement of stakeholdersabout RHS Besides that, a group discussion is carried out with Grab’s user toevaluate qualitatively impacts of RHS on local people Finally, the research willevaluate the dynamic movements of ride-hailing vehicles relied on data of the ride-hailing app (RHA) on Information & Communication Technology (ICT) devices –the smartphone Based on the background, objectives presented before, the researchquestion this study pursues to answer is: What is the current problem of ride-hailingservice?

This thesis consists of 5 chapters This chapter focuses on the background,problems statement as well as the main objectives of this research The followingchapters are written as follows:

Chapter 2 reviews previous researches in the literature to understand theresearch approach and how to find problems, thereby clarifying the researchobjectives in accordance with current studies.

Chapter 3 summarize the history of introducing RHS system into Vietnam;analyze the legal mechanism relating RHS; find out operation of Grab in Vietnamtransport market as well as reaction among stakeholders regarding its operation,thereby clarifying reasons of controversy around this type of service

Chapter 4 analyze the impacts of RHS on local people through groupdiscussion; describe procedures to collect data by Grab app on the smartphone,thereby determining the dynamic movements mechanism of the ride-hailing vehicle.Chapter 5 concludes the discussion and identify current problems which mayhave on RHS, thereby proposing appropriate policies

CHAPTER 2 LITERATURE REVIEW

2.1 Grab company

The initial idea for Grabtaxi started when classmate group of Anthony Tanvisited Malaysia and complained about their terrible experiences in a local taxi Thecomplaint from friends stimulated thoughts in Tan, he started thinking about what isthe problem of the taxi service in Malaysia and how to could improve it After cameback Harvard, Tan and his team built a business plan for application on thesmartphone that offers available taxis around the location of passengers by usingmapping and location-sharing (Phillip, 2014) With the feasibility and potentialcontributions of the project for solving social problems, it received a runner-up award

at the Harvard Business School’s 2011 Business Plan Contest

In 6/2012, Tan and his team returned to Malaysia, they drew up a businesscalled MyTeksi - nowadays known as Grab company After launch, GrabTaxi haschanged completely the image of taxi services, it expanded quickly and become themost convenient, fastest, and largest taxi booking service by app on the smartphone inthe South East Asian countries area (Phillip, 2014) In 1/2016, GrabTaxi wasrebranded as "Grab" which comprises all the company's products such as Grabbike,GrabCar, GrabExpress under one roof Until now, the company has appeared in 235cities (Reuter, 2018) throughout eight countries, including the Philippines, Malaysia,Singapore, Thailand, Vietnam, Myanmar, Indonesia, and Cambodia (Grab, 2018),with secured financial funds of over 7.5 billion USD (Techcrunch, 2019) To date,there have been 139 million downloads, 46 million daily rides (Fortune, 2019), and710.000 partners (drivers) on the Grab network (Grab, 2018), with an average of 7bookings per second (TechinAsia, 2015) According to Tan, the use of smartphone ispredicted to continue growing further in Asia, the demand for vehicle booking service

by app on mobile definitely will continue to rise Therefore, Grab set goals to increaseits revenue and fleets, offer a safer and more efficient transport service to all andbecome a leader RHC in Asia

2.2 Some key finding from studies about ride-hailing service in South East Asia countries

In Manila, Philippines, rising mobility demand, coupled with declining the level

of service of public transportation, has led to worsening congestion and commutingdifficulties in urban centers Ride-hailing transport modes, which allow commuters tobook trips through their smartphones, have become popular as an innovative strategy

to address these issues (NAPALANG & REGIDOR, 2017) The rapidly growingRHS, on one hand, supply substantial trip services and complete the trips requiring noparking demand; on the other hand, imposes congestion effects on all commuters (Su

& Wang, 2019) In Thailand, Grabtaxi has gradually moved into the phase of problemsolving: the long-existent complaints of traditional taxi service are now being solved;the values of wellbeing and quality ride and drive are being upheld However,Grabtaxi operates through mobile-based technology without having to obtain a taxioperator’s license or owning a taxi, therfore it can be seen as a threat to traditionaltaxi operators (Ackaradejruangsri, 2015) Examining the influence of customersatisfaction on RHS in Malaysia, comfort is the most influence factor on customersatisfaction, beside that tangible, reliability, price, promotion and coupon redemptionalso have positive significant association with customer satisfaction (Balachandran &Hamzah, 2017) In case study in Phnom Penh, Campuchia, research results shownthat after adopting ride-hailing apps (RHAs), the drivers could increase their revenue

by increasing the number of trips and customers RHAs would be opportunities forthose paratransit drivers who have adopted them, while they would be threats forthose who have not (Phun et al., 2018) Singapore government has identified fivedifferent types of technological risks: privacy, liability, automation, safety, andimpact on current industries To cope with them, Singapore government adopted fivedifferent strategies: no response, prevention-, control-, toleration-, and adaptation-oriented Singapore has applied a pro-active approach to prepare itself to address therisks associated with RHS (Li & Taeihagh, 2018) Motorcycle taxi has become morepopular in recent years since online ride-hailing companies launched motorcycle taxiservices (Phuoc

et al., 2019) The recent arrival of RHS might have altered the market for traditionalparatransit services in Asian developing cities In particular, the current strength ofmotorcycle taxi is their provision of a good connectivity service, but if more RHSpenetrate the market, motorcycle taxi operators will lose their market power – a casestudy in Bangkok (Phun et al., 2019).

2.3 Some key finding from studies about ride-hailing service in developed countries

The competition between taxis and RHCs is economically healthy, because itbreaks the monopoly of the taxi industry, forcing it to improve the quality of thesupplied service (Silva et al., 2018) From passenger’s standpoint, perceived utility,compatibility, relative advantage and trust are antecedents of user satisfaction withRHA (Joia & Altieri, 2018) Ride-hailing may effectively reduce drunk-driving, andare convinced that as this mode increases in importance in the future, it will have amuch more pronounced effect on the level of ridership of other modes as well (Youngand Faber, 2018) RHS of Uber has the biggest complementary effects on the publictransit systems that had the lowest ridership before Uber’s entry However, Uberseems to be decreasing ridership on larger systems (Hall et al., 2018) The ride-hailing induced trips that would not have been pursued if ride-hailing were notavailable such as trips for errand/leisure purposes Besides that, ride-hailing isgenerating more “drive alone” trips in the already-congested suburban and urbanareas to serve individuals that already have the resources to undertake drive-alonetrips, contrary to the main transportation and environmental goals of sustainable andequitable urban systems (Lavieri & Bhat, 2019) Very few older adults use RHS orexpect to use them in the future, however, RHS may be a viable future option forolder adults who have limited or stopped driving (Vivoda et al., 2018) Ride-hailingmode reduce fuel consumption and emissions sourced from empty cruising Afterdropping off previous passengers, ride-hailing drivers usually park their cars untilbeing dispatched new orders and then drive directly to pick up passengers rather thansearch circuitously as traditional taxi drivers (Sui et

al., 2019) One potential long-term effect of RHS may be observed on the householdvehicle ownership level; households that would have otherwise owned two or threevehicles may now function as effectively with only one vehicle, and utilizecompanies like Uber and Lyft for all other types of trips This is a significant shift intravel behavior of RHS’s user (Contreras & Paz, 2017) In Sao Paulo, Brazil, 83% ofcurrent e-hailing trips derived from trips that were previously made by traditionalmotorized private modes Total economic activity expands by 1.089% if averagevehicle occupancy reaches 3 passengers per trip and all motorized private trips aresubstituted by RHS (Haddad et al., 2019) RHS utilizes fleets of private cars and apptechnology, it operates between commercial and private services, they are partlyoutside the control of governments and, to some extent, contravene currentregulations (Aarhaug & Olsen, 2018) Some major American cities have passedregulations that require RHCs to provide a list of drivers and share trip data with cityofficials By creating these requirements, city officials may be able to estimate howmany ride-hailing trips are being made, and this can provide them with a betterunderstanding of whether limiting the number of vehicles is an appropriate regulation(Beer et al., 2017).

CHAPTER 3 METHODOLOGY

To identify the process of introducing RHS in Vietnam and to analyze the legalmechanism relating to RHS operation, the research has reviewed the webpages anddocuments of regulation relating to the transport business in Vietnam Somewebpages visited including the official website of Grab (Grab.com), internationalmagazines such as Tech in Asia, Vicent wee, or local newspapers online such asBnews, Tiasang Documents of regulation are referred to including Decision 24/QD-BGTVT which was promulgated by ministry of transport (MOT) and Decree86/2014/ND-CP which was promulgated by Prime minister Besides that, aim toidentify reaction among stakeholders regarding the RHS operation, statement ofstakeholders such as transportation expert, regulator, representative of traditional taxicompany, representative of Grab, representative of transport association/companywill be collected through social media Some social media channels visited includingParliamentary television, VOV national traffic channel, local newspapers online such

as Labor, DTInews, Vnexpress, Cafebiz, Vietnam news agency and the magazineonline such as Thanh Nien

The research will carry out a qualitative interview to gather insight about theimpacts of RHS on local people Questions that relate to trip purpose, time to use,usage characteristics, trip pattern, the travel behavior and perspective about issues ofRHS, has been given for respondents in the interview process

Finally, aim to determine and analyze the dynamic characteristic of RHS car, asurvey is carried out based on Grab app Available data on the app which include theavailability of ride-hailing vehicles, price of each trip, and the waiting time over aperiod of time in the day is collected Based on these data, the fluctuation of priceover time and the relationship between the availability and the waiting time of RHSwill be clarified

CHAPTER 4 INTRODUCING OF RHS, LEGAL MECHANISM AND CONTROVERSY IN OPERATION OF GRABCAR IN VIETNAM

4.1 The history of introducing RHS in Vietnam

In February 2014, Grab is a Singapore-based technology company that offersride-hailing service through its app in Singapore and neighboring Southeast-Asiannations In June 2012, "My Teksi" app was launched in Malaysia market (known as

"GrabTaxi" in other countries) In 2013, GrabTaxi expanded to the Philippines,Singapore, and Thailand In 2014, GrabTaxi further continued its growth andexpansion to new countries: first launching in Vietnam in February, and in Indonesia

in June

In the period from 2014 to 2016, at the initial time in Vietnam transport market,Grab reached out directly to taxi drivers by signing them up at airports, hawkercenters, taxi queues, and depots The company also educated taxi drivers on using thesmartphone and their mobile app In November 2014, GrabTaxi launched its firstGrabBike service in Ho Chi Minh City as a trial service By 2015, GrabBike'smotorcycle service rides had spread throughout Vietnam

In 1/2016, Ministry of Transport (MOT) promulgated Decision No.24,permitted GrabCar service to deploy in 5 cities, within 2 years, from 01/2016 to01/2018 5 cities in the pilot program of MOT according to Decision No.24 includingHanoi, Ho Chi Minh City, Da Nang, Khanh Hoa, Quang Ninh GrabCar has becomethe most popular one of the travel modes in the urban transport system

In 1/2018, time for pilot activities of GrabCar service was expired Vietnamgovernment and MOT are considering to build a new legal mechanism with newregulations for GrabCar’s activities In 4/2018, Uber sold whole their market share forGrab, withdrawn their activities from Vietnam

Figure 2 History of introducing RHS in Vietnam 4.2 Legal mechanism for operation of GrabCar service in Vietnam

In January 2016 the Ministry of Transport (MOT) promulgated decision No.24which allow the implementation of technology application into the management andconnection of activity of passenger transport under contract Decision No.24 allowsGrabCar service to legally operate in 5 cities within 2 years from 2016 to 2018, itmade a detailed pilot plan which aims to facilitate the application of science andtechnology to the transport industry as well as meet the practical demand of peoplesuch as time and transaction expenses reduction or the trend of using smartphone.According to decision No.24, there are 2 parties in this pilot plan including Grabcompany and transport companies/cooperatives The decision has clearly stated thatonly car drivers who are the member of transport companies/cooperatives arepermitted to participate in the pilot activity, car must be under 9 seats (including cardriver) with durable use is not over 08 years The transport companies/cooperativeswill manage and control the operation of vehicle/driver; build the trip pricecalculation method and provide for Grab company Meanwhile, Grab company isresponsible for installing connection application on smartphone of car driver; providefor the customer the trip price calculation method; time/place that the price of tripmay be adjusted; and bill after completing the trip Base on regulations of

Decision No.24, the role of Grab in the pilot plan is only the connection applicationprovider, and transport companies/cooperatives are the operators of GrabCar service.Until now, the pilot plan is expired, policymakers, MOT and Vietnam government arebuilding a new legal regulation that is more appropriate for the operation of GrabCar,however, they have met many difficulties due to the controversy around this new type

of transport service

4.3 Controversy among stakeholders regarding operation of GrabCar service

4.3.1 Lawsuit between traditional taxi and Grab

After GrabCar service has been approved for its activities in Vietnam, it causedbig controversy between traditional taxi company and RHC The lawsuit between arepresentative of the traditional taxi - Vinasun and Grab company is the peak point ofcontroversy The main purpose of Vinasun in this lawsuit is to influence and pressureVietnam government, aim to identify RHA suppliers that are taxi companies

Table 1 Information of plaintiff and defendant in lawsuit

Plaintiff Vinasun Defendant Grab

company in building the habit of moving

by technology vehicle in Vietnam.According to Vinasun, Grab has not complied with prevailing regulations TheMinistry of Transport’s Decision 24 on the pilot scheme for ride-hailing servicesindicated that Grab was permitted to operate as a ride-hailing service provider.However, Grab technically operates as a transport firm like traditional taxi firms.Vinasun claimed the “illegal” operations of Grab in Vietnam were to blame for a fall

in its revenues by VND41.2 billion (US$1.75 million) from 1/1/2016 to 30/6/2017

As such, Vinasun has demanded that Grab pay VND41.2 billion compensateVinasun’s losses

Vinasun allege that Grab took advantage of pilot activity to direct business,operate directly car driver, appoint who will pick up customer, decide fare, and adjustfare, collect money directly from customer, implement promotional programs, recruitdirectly car driver, make regulations to reward and punish car driver, connect withbank to help car driver could borrow 90% of car value, buy voluntary accidentinsurance for car driver and customer Vinasun claimed that Grab often offerspromotional programs for customers and issues points to drivers to promote itstransport service The ride-hailing firm’s activities, therefore, constitute a transportservice by nature, not merely a technology service Grab also has exploited the lack ofclear regulations for software-based transport services and offered “rampant”promotion deals and discounts, including “zero fee” trips, which was similar to thedumping of manufactured goods.

Figure 3 Allegation of Vinasun about operation of Grab

Grab negated all allegation from Vinasun, Grab has not directly participated intransport activities and asserts that the company only assists in transport activitymanagement for the transport company or transport cooperative For instance, inadjusting fare, the fare will be suggested by the transport company, all suggestionswill be taken into Grab’system and the applicable fare is outputted by the Artificialintelligence (AI) algorithm Besides that, Grab gave Vinasun questions: For industry4.0, What has Vinasun been doing? Vinasun applied science and technology forserving the customer or not? Has Vinasun ever considered

discounting fare to bring more benefits for the customer? Has Vinasun ever organized

a meeting to examine your service quality? Therefore, instead of blaming for impactsoutside, Vinasun should look at oneself to could change and contribute many benefitsfor the customer, for industry 4.0

Remarkable events in the lawsuit:

jurisdiction to settle the lawsuit

of Vinasun's petition

(41.2VND billion)

of Vinasun for the second time

Company to assess the damage (if any) of Vinasun

 24/09/2018 The trial was delayed because Grab require that they need more time to study report

finished However, the verdict has been adjourned until November 23 due to lack of concreteevidence and the appointed assessor, Cuu Long Valuation Inspection Company, was absent fromthe hearing sessions

Vinasun and Grab want to reconcile with each other The Council approved the proposal of both

operation of Grab is the taxi business, Grab violated Decree 86 and Decision No.24 of MOT,directly caused Vinasun’s losses However, Vinasun did not prove their damage is caused byonly Grab Therefore, Grab must compensate 4.8 billion VND for Vinasun’s losses The Councilalso asked MOT to make an appropriate management mechanism for operation of Grab

4.3.2 Opinions of stakeholders relating operation of GrabCar service in Vietnam

There is various interaction among stakeholders regarding the operation ofGrabCar service According to Spokesman of MOT at the beginning time ofdeploying Decision No.24: “Deployment of pilot activities of GrabCar service willenhance competition among passenger transport companies, also enhance competitionamong technology companies Company own management software which is morepotential, the customer will choose This competition is appropriate with marketrules”

15

Dr.Chu Cong Minh - Lecturer of BACHKHOA university said: “The currentregulations are extremely inadequate For instance, Grab cars are not required to stickthe logo at the side, do not have regulations for punishment So, management agencycannot control activities and amount of Grab cars The exploding of the number ofGrab car break transportation planning of the city, prevent the development of publictransportation vehicles”.

“The ban on the activity of Grab will cause bad impacts on the economic aspect.Not only Grab is damaged, but also car drivers will lose their main income ManyGrab drivers borrowed money to buy a car, but now, they cannot use it for transportbusiness and get into debt Taxi association in other countries also protest activities ofUber, Grab because they claim that Uber, Grab has many advantages in thecompetition which lead the unequal competition However, activities of Uber, Grab isnot banned, we should learn the way of management of these countries”, according toMrs.Pham Chi Lan - Economic expert

“New technology-based business model may not be encouraged, and subject totechnical barriers, but it does not mean that this new business model is eliminated.Apply type of taxi business for Grab is a serious mistake”, Mr.Nguyen Dinh Cung -Director of the central institute for economic management said

“Grab get 29,5% of trip cost However, they are not responsible for the safety ofpassenger and insurance coverage of driver and vehicle They operate activities ofdrivers but according to Decision No.24, Grab is only connection service supplier, it

is not a taxi business” Mr.Truong Dinh Quy - Deputy General Director of Vinasuncompany said

“If we identify Grab as a taxi company, we will negate efforts of government inthe process of promoting digital economy in Vietnam, this is the backwardness of theprocess of building a startup country in the 4.0 technology era The advantages ofsharing economy and the digital economy will completely disappear if we apply

the type of taxi business for Grab The consequences will be extremely large”,Mr.Jerry Lim – CEO of Grab Vietnam said.

According to Mr.Nguyen Van Thanh - Chairman of Vietnam AutomobileTransportation Association, “Cannot manage Grab like traditional taxi It is necessary

to build appropriate regulations for this new type of transport as well as remove theinadequacies in regulations of traditional taxi”

“In nature, the traditional taxi and GrabCar are the same However traditionaltaxi is under 13 regulations of the type of passenger transport business by Taxi, butGrabCar is not It can change the cost of trip, don’t need the permission ofmanagement agency GrabCar is under regulations that are very open Traditional taxiand GrabCar are same in nature and enter into a common transport market However,business conditions are not the same It creates an unfair business environment,cannot enhance competition among transport companies So, it can facilitate Grabcompany becoming a monopoly”, Mr.Ta Long Hi – Chairman of transport association

Ho Chi Minh said

According to “The weird transformation of sharing economy in Vietnam” article

of 2 journalists Van Chuong - Ha Phuong: “Initial idea of Uber, Grab application base

on sharing economy model People will share their idle car with others, restrictingprivate vehicles in big cities Drivers can make more money, and passengers havemore selection for journeys with cheap price However, these purposes are beingchanged, it is not sharing economy, Uber and Grab have become the main job withthe appearance of thousands of professional drivers”

“If Grab is identified as a taxi company, Grab will be affected, followed by acustomer The improper identification of nature makes the enterprise be limited inpromoting its strengths In the context of e-commerce is a common trend, applyingtransport business laws into technology application services will force enterprises tochange their nature and business model” Lawyer.Truong Thanh Duc – President oflaw company - BASICO said

4.4 Conclusion

The rapid development of Grab forces traditional taxi companies to haveinteractions to protect their own rights on the transport market The traditional taxiclaim that the operation of Grab and taxi company are the same, however, businessconditions of traditional taxi are more complicated than Grab so much So that, thecompetition between Grab and the traditional taxi on the transport market is unfair.Traditional taxi companies/associations have asked management agencies to controland manage Grab as a taxi company, ensure an equal business environment for all.Nonetheless, practically, Grab is only cooperating with partners including transportcompanies/cooperatives, in order to support car drivers to connect with customersmore easily and conveniently The relationship of Grab and car drivers is relationshipamong partners, Grab does not own a vehicle or any driver Therefore, identifyingGrab as a taxi company and applying regulations of taxi for Grab will lose thetechnological advantages of RHS as well as change the nature of enterprise

The launch of GrabCar service has impacts significantly on Vietnam transportmarket, especially the taxi industry Traditional taxi companies have changed theirbusiness strategy since the launch of GrabCar, they have offered a taxi service thathas better quality for the customer, or some companies have launched a vehiclebooking app on the smartphone which is similar to Grab's app As a result, customershave benefited the most from these positive changes The emergence of GrabCarservice also has shown that, in the 4.0 technology era, besides building a new legalregulation for the operation of GrabCar service, current complicated businessconditions of traditional taxi need to be removed to create a fairer and morecompetitive business environment for both GrabCar and traditional taxi

CHAPTER 5 THE IMPACT OF RHS ON LOCAL PEOPLE AND

DYNAMIC MOVEMENTS OF RIDE-HAILING CAR

5.1 Survey description

5.1.1 Data collection by group discussion (qualitative interviews)

Aim to gather insight about the impacts of RHS on local people, a qualitativeinterviews was conducted with the support of Dr.Phan Le Binh and staff of Vietnam-Japan university (VJU) The qualitative interview was carried out on 24 May 2019with the participation of 4 respondents (3 female and 1 male) who are the staff ofVJU, in which, 3 respondents use Grab frequently for their trips, 1 respondent onlyuses Grab on some occasion; 2 people in middle age (43 years old) and 2 youngpeople (28 years old) The interview was organized at VJU and took place within 1hour under the witness of supervisor Dr.Phan Le Binh

Figure 4 Image of the interview at VJU

The content of the interview focuses on usage characteristic of RHS user andopinion of the respondent about problems which relate to the operation of RHS Mainquestions are prepared before the interview take place The interview is a free-flowing conversation between the interviewer and respondents Respondents, besidesanswering questions, may share freely their thought, assessment, and

perspective about relevant issues In the interview process, sub-questions may arisecontinuously by the reciprocal interaction between the interviewer and respondents.

In order to avoid bias in the qualitative interview, keep the question simple and

do not use questions that can lead the participant to respond in favor of a particularassumption For instance, instead of using the question: “Do you think that the price

of Grab in bad weather or the peak-hour is very high?”, use another question: “How

do you assess about price calculation mechanism of Grab in some special situationssuch as bad weather or the peak-hour?”

Main questions which are given in the interview are listed below:

Does it stimulate your purchase demand or not?

special situations such as bad weather or the peak-hour?

And you can accept how long is waiting time?

5.1.2 Data collection by Grab app

The survey was conducted by collecting data of dynamic movements of hailing vehicles on the specific journey (O-D) through the Grab app on thesmartphone Data can gather from 1 vehicle booking times on the app includingavailability of ride-hailing vehicles, price of each trip, and the waiting time overperiod of time in day The survey aims to examine the fluctuation of price over time

ride-as well ride-as the relationship between the availability and the waiting time, therebyclarifying why the surge pricing always happens in bad conditions such as the peak-hour or rainy day

Figure 5 The availability of ride-hailing

car

Figure 6 The waiting time and the price

of tripThe survey was conducted within 5 days of week including: Monday,Wednesday, Friday, Saturday, and Sunday Aim to ensure the result of examining thefluctuation of the price over time is the most accurate, the survey needs to be carriedout within 24 hours in a day, with the frequency is 1 vehicle booking times on 5minutes Data of temperature and precipitation of survey days also were

collected, because the fluctuation of the price depends on the weather (base on the

result of the qualitative interview) The detailed information of survey days are listed

-The available data on Grab app were collected in each specific zone Zone are

suggested by geographical location and typical characteristic of each area Hoan

Kiem district is representative of zone 1 Hoan Kiem is the urban core of Hanoi city,

local people call Hoan Kiem region is the central business district (CBD) of the city

because a large number of agencies, offices, commercial complex concentrated here

Zone 2 includes 2 districts which are Dong Da and Thanh Xuan In these districts, the

number of agencies and offices and the number of households are similar Bac Tu

Liem district is a representative selection for zone 3 Bac Tu Liem is the suburb

district of the city, it is a major residential area, there are not too many agencies,

offices or commercial complex here

Table 3 The characteristic of zone Zone District The characteristic of zone

2 Dong Da + Thanh Xuan Agency/office + resident area

Zone 3

Zone 1

Zone 2

Figure 7 The location of districts in the city

The O-D pairs on each zone are fixed and set on the principle: Origin is inresidential area and destination is in the agency/office area The detailed O-D pairs oneach zone are listed below

Table 4 The O-D pair

Origin: 64 Nguyen KhietDestination: Hanoi Tower

Destination

Origin: Royal city

Destination Destination: 278 Ton Duc

In order to avoid the bias of the survey result, do not apply the promotion or thecashless payment for all trips Using promotion or cashless payment make the realprice of trip decrease from 30.000VND to 50.000VND, it leads to the wrong results

of monitoring the fluctuation of price over time Besides that, because the survey takeplace continuously within 24 hours, it requires at least 2 people to take turns working

on the cellphone (change the turn after 2 hours working on the cellphone), avoid loss

of data by subjective factors

5.2 Group discussion (qualitative interviews)

5.2.1 Group discussion record

Me: What is your trip purpose when using Grab service? Go to work, leisure,business, meeting, send-off/pick up family member, delivery or shopping, so on?Mrs.Nhu: I use Grab for all purpose you said, but my major purpose when usingGrab is to go to work and book vehicle to send-off/ pick up my children

Me: When Grab has not appeared in Vietnam yet, how did you send-off/pick upyour children?

Mrs.Nhu: At that time, my children still were young, I took my children toschool or learning center by myself

Me: Have you ever picked up/sent off your children in the working time whenGrab has not appeared in Vietnam?

Mrs.Nhu: No, I have never At that time, my children didn’t have manyextracurricular classes as now Now, my child is a senior pupil, his travel demand isvery high, he must travel to many places for his extracurricular classes within oneday, and I cannot pick up/send-off him like before

Me: You allow your child to travel by himself when how old he was?

Mrs.Nhu: When he was at 8-9 grade (about 13-14 years old)

Mrs.Hien: In my point of view, Grab is the most intelligent and civilizedtechnology-based transport service ever before The first time Grab launched Vietnamtransport market, they have brought so many promotions to the customer, this activityencouraged customer using their service Grab appeared and solved the problem of

my family: who must send-off and pick up the children? Who must leave officesooner to send-off and pick up them, me or my husband? One of the features of Grab

I like the most is I can track the journey on my smartphone, I know where my childmove to, who they accompany and name of driver, some parents even allow theirdaughter to use Grabcar at late hours (from 21h-22h) by its tracking function, I neverdare to use traditional motorcycle-taxi (xe om) to send off/pick up my childrenbefore, this type of service make me not feel assured, I feel not comfortable because Idon’t know how much the price is from A to B to bargain with driver When Grab haslaunched, besides using Grabcar, I also use Grabbike for picking up and sending-off

my children by its advantages such as saving travel expenses, send-off/pick up door

to door (*) In the half of the first year of using Grab, my travel expense by usingGrab was very low, about 50.000VND/month (250Yen/month), Grab has offeredpromotions constantly such as give 5 trips with 30.000VND/trip, the price of tripfrom my home to office or shopping mall is about

27.000VND, and I didn’t have to pay any fee for my trip To summarize, my majorpurposes of using Grab are to send off /pick up children, sometimes go to work anddelivery

condition in Hanoi

Mrs.Van: My major purpose is to go to work, delivery I also usually use another service of Grab - Grabfood

Me: How long everyone has used Grab?

Mrs.Hien: In the initial time, I mainly use Uber After that, I switched to Grab

I have used Grab for 3 years

Mrs.Van: I also have used Grab about 3 years.

Me: Does everyone use Grab every day?

Mrs.Hien: Almost like that

Mrs.Van: If I miss the bus, I will use Grab to go to work

Me: I realized that the main purpose of using Grab of everyone is the same.However, from the opinion of Mrs.Hien, I see one of reason make everyone likeusing Grab is Grab have much promotion, assume that Grab doesn’t give anypromotions, does everyone still use this service or not?

Mrs.Hien: I still use because if I don’t use, no one sends off/picks up mychildren Recently, I don’t get any promotions of Grab, however, I still use it due tothe necessary demand of my own and my children

Mrs.Nhu: With myself, I only use Grabcar service, don’t use Grabbike I haveever tried using Grabbike service once time, I realized this type of service isn’tprofessional, lack of safety, all people can become Grabbike driver with onemotorcycle and one smartphone, I never use Grabbike for trips of my children

Me: In nature, Grabbike and traditional motorcycle-taxi (xe om) are the same,the basic difference is the technology application of Grabbike in connecting with thecustomer And another question, after Grab appears in Vietnam, do you still usetraditional taxi or not?

Mrs.Hien: I nearly don’t use the traditional taxi, if I cannot book Grabcar, I willprioritize using my private vehicle or walking

Mrs.Nhu: I still use traditional taxi in some situations In the peak hour, whenthe price of Grab is so high, and taxis are available on the road, I will hail a taxi (theprice of taxi don’t change over time) Or sometimes when the battery of smartphone

is empty, certainly, I must take a taxi Or some urgent situation, I don’t have time to

book a vehicle and wait, I will choose taxis which are available on the road.

Traditional taxi is still very convenient in some case

Mrs.Van: I still use both, when I see the price of Grab is so high and I feel that Ican not accept, I will choose the traditional taxi The price of taxi is more expensivethan the price of Grab with promotion but cheaper than in peak hour

Me: Which time do you use Grab during the day? Which day of the week?Mrs.Hien: It depends on the learning schedule of children And I also often useGrab on weekend evenings for leisure purpose or visiting relatives

Me: What are the important factors when you choose Grab?

Mrs.Nhu: Firstly, I mustn’t wonder whether the driver has detoured? I know theprice before booking, if I feel happy, and willing to pay for this price, I will book, thedecision is mine Secondly, I know the information, name and appearance of thedriver before getting on the car, it makes me feel more assured

Mrs.Hien: Grab has built one smart and modern app Firstly, it helps me trackthe journey of my children through the app Next, instruction on the app is verycareful and exact, I can see clearly the name of lane, name of alley and places around

my origin and destination on the app Thirdly, Grab app rarely be lagged and datadisplay on the app such as waiting time, availability, the location of driver, themovement of vehicle are estimated very accurately Accuracy of these data hashelped me so much in booking vehicle, for example, base on availability car data onapp, if around my location, there are 8-10 available vehicles, I will book vehiclewhenever I want, however, if there are only 1-2 vehicles, I have to book vehiclebefore about 5 minutes

Me: Does everyone care the about the payment method when using Grab tosend off/pick up children?

Mrs.Hien and Mrs.Nhu: Of course!

Mrs.Nhu: With the cashless payment method, we only need recharging moneyinto e-wallet to pay for the trip and our children also don’t need to bring too muchcash in hand Problems which we concern before are no longer exist.

Mrs.Hien: One more outstanding feature of Grab is that I can rate the serviceattitude of car driver after each trip, or send directly my feedback to the customerservice department of Grab Drivers who are judged to have the poor service attitudewill be punished by Grab, and the highest penalty is to stop providing the customerconnection app of Grab for driver

Me: Before Grab has appeared in Vietnam, if you want to buy something, youmust come to the store where it has goods you need, buy and bring it back However,currently, Grab can help you do that, it will deliver goods which you buy to yourplace And my question is that How does your purchase demand change after Grabappeared in the market? Does it stimulate your purchase demand or not?

Mrs.Hien: The launch of Grab doesn’t impact on my purchase demand I useGrab for delivery purpose when I need sending something to my relatives, friends orpartners

Mrs.Van: My purchase demand is higher than before, especially, after Grab haslaunched Grab food service My spouse often this type of service to buy snack foodsand drinks every evening

Mrs.Nhu: Grab doesn’t impact on my purchase demand If I want to eat or drinksomething, I prefer going outside rather than order food and drinks to home

Me: After using Grab, how does your travel expense change?

Mrs.Nhu: The launch of Grab make me change private vehicle usage habit Ihaven’t used my motorcycle for 2 years I think travel expense by Grab maybe ismore slightly expensive than travel expense by private vehicle, however, I am willing

to pay for the trip by Grab, traveling by Grab is more preferable than driving ownmotorcycle

Me: How do you assess about price calculation mechanism of Grab in somespecial situations such as bad weather or the peak-hour?

Mrs.Nhu: In the off-peak hour, a distance of 3 km, it only costs about30.000VND However, the rainy day, the price is about 120.000, more than 4 timesMrs.Hien: Not only the rainy day but also the peak hour, weekends, holiday, theprice of Grab is more than about 3-4 times Meanwhile, Be - one other RHS supplieralways keeps their price in every period of time, every occasion, however, Beedoesn’t have many promotions like Grab

Mrs.Nhu: When surge pricing happens, after about 1-2 minutes I book onceagain, the price is 100.000VND down to 30.000VND

Mrs.Van: At peak hour, the price of Grab fluctuates wildly, it costs about128.000VND from my house to VJU Meanwhile, in normal conditions, the price isonly about 70.000VND Therefore, at that moment, I will use traditional taxi, theprice is about 100.000VND

Me: Currently, there is no management mechanism to control the price of Grab,what do you do when surge pricing happens?

Mr.Tan: I will compare between the price of Grab and price of other RHScompany, which company offers the most suitable price which makes me satisfy Iwill choose If the price of all is equally expensive, I will choose traditional taxi, theprice of traditional doesn’t change over time

Mrs.Hien: So I am If I’m not too hurry, I will wait until the price go down

No one chooses an expensive price, while the actual price is less than 3-4 times.Me: From all opinions, I realize that everyone always prioritizes using Grab fortrips, traditional taxi is only the second selection However, currently, sometraditional taxi companies have built booking app on the smartphone and introduce

to the customer, assume that the car booking app of that companies is as good as Grabapp Do you think you will use the traditional taxi back?

Mrs.Nhu: I’m willing to use the traditional taxi However, as I know, currently,booking app of traditional taxi companies is still not completed like Grab’s app andthe number of car of traditional taxi companies is very few And traditional taxicompanies also don’t apply the cashless payment method for trips

Mrs.Van: I think traditional taxi companies must build an app which is betterthan Grab’s app and have marketing strategies for their app Currently, Grab app hasbeen very popular in car booking market and most people are acquainted with usingthis app I don’t think people will change their habit, using another car booking appwhile Grab app is still good enough

Me: Traditional taxi companies and transport associations claim that Grabcompany must be managed and controlled as traditional taxi because its operation inVietnam transport market is the same with the operation of taxi company How doyou think about this?

Mrs.Hien: From point of view of the user, I think that customer only cares aboutbenefits which they can get from service suppliers Which company can bring morebenefits to customer such as more promotions, the better price, more convenience,they will choose using service of that company Within 5 years, Grab has supplied aperfect type of service to the customer, and people also love using this type of servicefor their trips I think that traditional taxi companies should change their businessstrategies, improve quality of service, develop technology application to be able tocompete with new modes in the transport market

Me: Come back problems in peak hours, how do you think about the waitingtime when using Grab in peak hours?

Mrs.Hien: Waiting time in peak hour is longer than normal hours, maximum ofwaiting time is 15 minutes It also depends on your location, if there are few carsaround your location, the waiting time also is longer

Mrs.Van: In peak hours, some car drivers don’t want to pick up customers,therefore it’s very difficult to catch a car at this moment, so the waiting time will belonger

Me: You can accept how long is waiting time?

Mrs.Hien: Not over 15 minutes

Mrs.Nhu: It depends on the trip purpose If I’m not hurrying, 15 minutes ormore are accepted However, if I must move immediately, I only wait within 5-10minutes

Mrs.Van: When I go to work in the morning, if the waiting time is more than 5minutes, I will cancel

Me: Does everyone use Grab as a paratransit mode? For example, the distancebetween your home and bus station is far Before Grab has appeared, you must walk

to the bus station But now, you can use Grab to take you to come to the bus station.Mrs.Hien: As for myself, my house is at Giang Vo, but I must park my car atKim Ma (*) I cannot walk due to long distance, therefore I will catch a Grabbike totake me from home to car parking and vice versa The price is not too much, and I cansave my time and effort Some of my friends also use Grab as a paratransit mode Due

to the long distance between their home and office, if they only use Grab to commute,travel expenses are very expensive Therefore, they choose bus which is the mainmode to commute Nonetheless, the distance between their home and the bus stationalso is not too short (about 2km), so they use Grab as a paratransit mode to movefrom home to the bus station From here, they will use bus to come to their office Bythis way, maybe the travel time will be longer, however, the travel expense will muchcheaper