Ride-hailing service in Vietnam market and its impacts on travel behavior of local people

Traditional taxi companies have changed their business strategy since the launch of GrabCar, they have offered a taxi service that has better quality for the customer, or some [r]

ACKNOWLEDGMENT

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 study environment of the top university in Vietnam

First of all, I would like to express my endless thanks and gratefulness to my research supervisor Professor Hironori Kato and Doctor Phan Le Binh for his kind support and continuous advice during research time Their encouragement and comments had significantly enriched and improved my research process Without their motivation and instructions, my research would have been impossible to be done

Furthermore, from bottom of my heart, I would like to thanks Program Director of Infrastructure Engineering Program of Vietnam-Japan University (VJU), Prof Nguyen 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 of Vietnam Japan University Their kindly help and guidance has inspired me and helped me to overcome the challenges which I faced during the period of study at Vietnam Japan University

Although I tried to complete this research by all my effort, however, there are still many errors and shortcomings for many reasons I look forward to receiving comments 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   6 

2.3. Some key finding from studies about ride‐hailing service in developed 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 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 

CHAPTER 6. DISCUSSION AND CONCLUSION   54 

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   

LIST OF ABBREVIATIONS

ABSTRACT

Ride-hailing service (RHS) is a new travel mode in urban transport system, it

is called 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 to Vietnam transport market and travel habit of people Until now, there has been still no completed regulation for the operation of RHS in Vietnam RHS has caused big controversy with the domestic taxi industry, traditional taxi companies claim that RHS is no different from taxis, and that ride-hailing companies (RHCs) should be held to the same operating requirements and regulations as taxi companies, including licensing, 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 of the RHS car, some interesting findings have been revealed The fluctuation of the price of Grab depends on the demand of the market When the demand is high, the price of the trip will high and vice versa The great fluctuation of price frequently happens at the morning peak – hour (6h-9h) on weekdays when people have a high demand for going to work On the weekend, the price frequently fluctuates widely in the afternoon (16h30-19h), in the evening (19h-22h) and at night (22h-23h) when people have a high demand for leisure purpose and going back their home The waiting time for a RHS car does not only depend on the number of the available car around but also depends on the distance between the vehicle and the customer A potential assumption also has been proposed that the algorithm of Grab app automatically raises prices to balance between demand and supply because when bad conditions happen

CHAPTER 1 INTRODUCTION

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

RHS has appeared in Vietnam transport market in 2014 with 2 RHCs – Uber and Grab Until 4/2018, Uber sold the whole market share for Grab, stopped providing all services of Uber in Vietnam After Uber was taken over, Grab has occupied a large share of the passenger transport market Within 5 years, Grab almost has dominated the individual public transport market in Vietnam, it has supplied service to a majority of metropolitan regions spanning throughout 36 provinces/cities across the country with 175.000 partners (drivers), has become a important portion of urban transport and affect significantly to operation of other types of transport business, especially type of traditional taxi business as well as travel behavior of people According to Vietnam Parliament Television, by the end

of 2017, in Hanoi and Ho Chi Minh City, the number of traditional taxi car is only 23.000, reduced 8000 vehicles compared with transportation planning, meanwhile number of Grab car, from 0 vehicles, increased up to 37000 vehicles The frequency

of riding traditional 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 Asia Plus 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 in Vietnam Besides that, RHS also has been causing the big controversy among stakeholders regarding regulatory statutes imposed on its operation

The purpose of this study is to understand the history of introducing and the operation of RHS in Vietnam market as well as the reason of controversy based on the review of related websites, review of related laws, and statement of stakeholders about RHS Besides that, a group discussion is carried out with Grab’s user to evaluate qualitatively impacts of RHS on local people Finally, the research will evaluate 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 research question this study pursues to answer is: What is the current problem of ride-hailing service?

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

Chapter 2 reviews previous researches in the literature to understand the research approach and how to find problems, thereby clarifying the research objectives 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 Vietnam transport 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 group discussion; 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 may have 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 Tan visited Malaysia and complained about their terrible experiences in a local taxi The complaint from friends stimulated thoughts in Tan, he started thinking about what is the problem of the taxi service in Malaysia and how to could improve it After came back Harvard, Tan and his team built a business plan for application on the smartphone that offers available taxis around the location of passengers by using mapping and location-sharing (Phillip, 2014) With the feasibility and potential contributions 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 business called MyTeksi - nowadays known as Grab company After launch, GrabTaxi has changed completely the image of taxi services, it expanded quickly and become the most convenient, fastest, and largest taxi booking service by app on the smartphone

in the South East Asian countries area (Phillip, 2014) In 1/2016, GrabTaxi was rebranded as "Grab" which comprises all the company's products such as Grabbike, GrabCar, GrabExpress under one roof Until now, the company has appeared in 235 cities (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), and 710.000 partners (drivers) on the Grab network (Grab, 2018), with an average of 7 bookings per second (TechinAsia, 2015) According to Tan, the use of smartphone is predicted 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 increase its revenue and fleets, offer a safer and more efficient transport service to all and become 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 commuting difficulties in urban centers Ride-hailing transport modes, which allow commuters to book trips through their smartphones, have become popular as an innovative strategy to address these issues (NAPALANG & REGIDOR, 2017) The rapidly growing RHS, on one hand, supply substantial trip services and complete the trips requiring no parking demand; on the other hand, imposes congestion effects on all commuters (Su & Wang, 2019) In Thailand, Grabtaxi has gradually moved into the phase of problem solving: 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 taxi operator’s license or owning a taxi, therfore it can be seen as a threat to traditional taxi operators (Ackaradejruangsri, 2015) Examining the influence of customer satisfaction on RHS in Malaysia, comfort is the most influence factor on customer satisfaction, beside that tangible, reliability, price, promotion and coupon redemption also have positive significant association with customer satisfaction (Balachandran & Hamzah, 2017) In case study in Phnom Penh, Campuchia, research results shown that after adopting ride-hailing apps (RHAs), the drivers could increase their revenue by increasing the number of trips and customers RHAs would be opportunities for those paratransit drivers who have adopted them, while they would be threats for those who have not (Phun et al., 2018) Singapore government has identified five different types of technological risks: privacy, liability, automation, safety, and impact on current industries To cope with them, Singapore government adopted five different strategies: no response, prevention-, control-, toleration-, and adaptation-oriented Singapore has applied a pro-active approach to prepare itself to address the risks associated with RHS (Li & Taeihagh, 2018) Motorcycle taxi has become more popular in recent years since online ride-hailing companies launched motorcycle taxi services (Phuoc

et al., 2019) The recent arrival of RHS might have altered the market for traditional paratransit services in Asian developing cities In particular, the current strength of motorcycle taxi is their provision of a good connectivity service, but if more RHS penetrate the market, motorcycle taxi operators will lose their market power – a case study 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 it breaks the monopoly of the taxi industry, forcing it to improve the quality of the supplied service (Silva et al., 2018) From passenger’s standpoint, perceived utility, compatibility, relative advantage and trust are antecedents of user satisfaction with RHA (Joia & Altieri, 2018) Ride-hailing may effectively reduce drunk-driving, and are convinced that as this mode increases in importance in the future, it will have a much more pronounced effect on the level of ridership of other modes as well (Young and Faber, 2018) RHS of Uber has the biggest complementary effects on the public transit systems that had the lowest ridership before Uber’s entry However, Uber seems 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 not available such as trips for errand/leisure purposes Besides that, ride-hailing is generating more “drive alone” trips in the already-congested suburban and urban areas to serve individuals that already have the resources to undertake drive-alone trips, contrary to the main transportation and environmental goals of sustainable and equitable urban systems (Lavieri & Bhat, 2019) Very few older adults use RHS or expect to use them in the future, however, RHS may be

a viable future option for older adults who have limited or stopped driving (Vivoda

et al., 2018) Ride-hailing mode reduce fuel consumption and emissions sourced from empty cruising After dropping off previous passengers, ride-hailing drivers usually park their cars until being dispatched new orders and then drive directly to pick up passengers rather than search circuitously as traditional taxi drivers (Sui et

al., 2019) One potential long-term effect of RHS may be observed on the household vehicle ownership level; households that would have otherwise owned two or three vehicles may now function as effectively with only one vehicle, and utilize companies like Uber and Lyft for all other types of trips This is a significant shift in travel behavior of RHS’s user (Contreras & Paz, 2017) In Sao Paulo, Brazil, 83% of current e-hailing trips derived from trips that were previously made

by traditional motorized private modes Total economic activity expands by 1.089%

if average vehicle occupancy reaches 3 passengers per trip and all motorized private trips are substituted by RHS (Haddad et al., 2019) RHS utilizes fleets of private cars and app technology, it operates between commercial and private services, they are partly outside the control of governments and, to some extent, contravene current regulations (Aarhaug & Olsen, 2018) Some major American cities have passed regulations that require RHCs to provide a list of drivers and share trip data with city officials By creating these requirements, city officials may be able to estimate how many ride-hailing trips are being made, and this can provide them with a better understanding 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 legal mechanism relating to RHS operation, the research has reviewed the webpages and documents of regulation relating to the transport business in Vietnam Some webpages visited including the official website of Grab (Grab.com), international magazines such as Tech in Asia, Vicent wee, or local newspapers online such as Bnews, Tiasang Documents of regulation are referred to including Decision 24/QD-BGTVT which was promulgated by ministry of transport (MOT) and Decree 86/2014/ND-CP which was promulgated by Prime minister Besides that, aim to identify reaction among stakeholders regarding the RHS operation, statement

of stakeholders such as transportation expert, regulator, representative of traditional

association/company will be collected through social media Some social media channels visited including Parliamentary television, VOV national traffic channel, local newspapers online such as Labor, DTInews, Vnexpress, Cafebiz, Vietnam news agency and the magazine online such as Thanh Nien

The research will carry out a qualitative interview to gather insight about the impacts 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

of RHS, has been given for respondents in the interview process

Finally, aim to determine and analyze the dynamic characteristic of RHS car, a survey is carried out based on Grab app Available data on the app which include the availability of ride-hailing vehicles, price of each trip, and the waiting time over

a period of time in the day is collected Based on these data, the fluctuation of price over time and the relationship between the availability and the waiting time of RHS will 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 offers ride-hailing service through its app in Singapore and neighboring Southeast-Asian nations 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 and expansion 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, hawker centers, taxi queues, and depots The company also educated taxi drivers on using the smartphone and their mobile app In November 2014, GrabTaxi launched its first GrabBike service in Ho Chi Minh City as a trial service By 2015, GrabBike's motorcycle 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 to 01/2018 5 cities in the pilot program of MOT according to Decision No.24 including Hanoi, Ho Chi Minh City, Da Nang, Khanh Hoa, Quang Ninh GrabCar has become the most popular one of the travel modes in the urban transport system

In 1/2018, time for pilot activities of GrabCar service was expired Vietnam government and MOT are considering to build a new legal mechanism with new regulations for GrabCar’s activities In 4/2018, Uber sold whole their market share for Grab, 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.24 which allow the implementation of technology application into the management and connection of activity of passenger transport under contract Decision No.24 allows GrabCar service to legally operate in 5 cities within 2 years from 2016 to 2018, it made a detailed pilot plan which aims to facilitate the application of science and technology to the transport industry as well as meet the practical demand of people such 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 Grab company and transport companies/cooperatives The decision has clearly stated that only car drivers who are the member of transport companies/cooperatives are permitted to participate in the pilot activity, car must be under 9 seats (including car driver) with durable use is not over 08 years The transport companies/cooperatives will manage and control the operation of vehicle/driver; build the trip price calculation method and provide for Grab company Meanwhile, Grab company is responsible for installing connection application on smartphone of car driver; provide for the customer the trip price calculation method; time/place that the price

of trip may 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 application provider, and transport companies/cooperatives are the operators of GrabCar service Until now, the pilot plan is expired, policymakers, MOT and Vietnam government are building 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 caused big controversy between traditional taxi company and RHC The lawsuit between a representative of the traditional taxi - Vinasun and Grab company is the peak point of controversy The main purpose of Vinasun in this lawsuit is to influence and pressure Vietnam government, aim to identify RHA suppliers that are taxi companies

Table 1 Information of plaintiff and defendant in lawsuit

Taxi group was established and

developed in Vietnam

Southeast Asia region, a pioneer company in building the habit of moving

by technology vehicle in Vietnam

According to Vinasun, Grab has not complied with prevailing regulations The Ministry of Transport’s Decision 24 on the pilot scheme for ride-hailing services indicated 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 compensate Vinasun’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 adjust fare, collect money directly from customer, implement promotional programs, recruit directly car driver, make regulations to reward and punish car driver, connect with bank to help car driver could borrow 90% of car value, buy voluntary accident insurance for car driver and customer Vinasun claimed that Grab often offers promotional programs for customers and issues points to drivers

to promote its transport service The ride-hailing firm’s activities, therefore, constitute a transport service by nature, not merely a technology service Grab also has exploited the lack of clear regulations for software-based transport services and offered “rampant” promotion deals and discounts, including “zero fee” trips, which was similar to the dumping of manufactured goods

Figure 3 Allegation of Vinasun about operation of Grab

Grab negated all allegation from Vinasun, Grab has not directly participated in transport activities and asserts that the company only assists in transport activity management for the transport company or transport cooperative For instance, in adjusting fare, the fare will be suggested by the transport company, all suggestions will be taken into Grab’system and the applicable fare is outputted by the Artificial intelligence (AI) algorithm Besides that, Grab gave Vinasun questions: For industry 4.0, What has Vinasun been doing? Vinasun applied science and technology for serving 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 impacts outside, Vinasun should look at oneself to could change and contribute many benefits for the customer, for industry 4.0

Remarkable events in the lawsuit:

 03/05/2017 Vinasun filed a lawsuit against Grab and Uber

 20/06/2017 The People's Court of Ho Chi Minh City confirmed the jurisdiction to settle the lawsuit

 07/08/2107 Vinasun adjusted the petition, took Uber out of the lawsuit

 10/08/2017 The People's Court of Ho Chi Minh City approved the adjustment of Vinasun's petition

 15/11/2017 Vinasun adjusted the petition, increasing the amount of damage (41.2VND billion)

 29/11/2017 The People's Court of Ho Chi Minh City approved the adjustment of Vinasun for the second time

 06/02/2018 The People's Court of Ho Chi Minh City opened court of the first instance

 04/05/2018 The Council asked stakeholder to suggest a list of damage inspection companies

 10/05/2018 Grab submitted list of international damage inspection companies to the Council

 30/05/2018 The Council appointed the Cuu Long Valuation Inspection Company to assess the damage (if any) of Vinasun

 20/08/2019 Cuu Long completed and submitted a report to the Council

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

 17/10/2018 The third trial was opened

 29/10/2018 As expected, the verdict would be given and the trial would be finished However, the verdict has been adjourned until November 23 due

to lack of concrete evidence and the appointed assessor, Cuu Long Valuation Inspection Company, was absent from the hearing sessions

 23/11/2018 The trial was suspended within 1 weeks

 30/11/2018 Vinasun and Grab suggested the Council suspend the trial Vinasun and Grab want to reconcile with each other The Council approved the proposal of both

 26/12/2018 Mediation process failed The trial was open again

 28/12/2018 The verdict would be given The Council claimed that the 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 by only Grab Therefore, Grab must compensate 4.8 billion VND for Vinasun’s losses The Council also 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 of GrabCar service According to Spokesman of MOT at the beginning time of deploying Decision No.24: “Deployment of pilot activities of GrabCar service will enhance competition among passenger transport companies, also enhance competition among technology companies Company own management software which is more potential, the customer will choose This competition is appropriate with market rules”

Dr.Chu Cong Minh - Lecturer of BACHKHOA university said: “The current regulations are extremely inadequate For instance, Grab cars are not required to stick the logo at the side, do not have regulations for punishment So, management agency cannot control activities and amount of Grab cars The exploding of the number of Grab car break transportation planning of the city, prevent the development of public transportation 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 Many Grab drivers borrowed money to buy a car, but now, they cannot use it for transport business and get into debt Taxi association in other countries also protest activities of Uber, Grab because they claim that Uber, Grab has many advantages in the competition which lead the unequal competition However, activities of Uber, Grab is not banned, we should learn the way of management of these countries”, according to Mrs.Pham Chi Lan - Economic expert

“New technology-based business model may not be encouraged, and subject

to technical 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

of passenger and insurance coverage of driver and vehicle They operate activities

of drivers 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 Vinasun company said

“If we identify Grab as a taxi company, we will negate efforts of government

in the process of promoting digital economy in Vietnam, this is the backwardness of the process of building a startup country in the 4.0 technology era The advantages

of sharing 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 Automobile Transportation Association, “Cannot manage Grab like traditional taxi It is necessary to build appropriate regulations for this new type of transport as well as remove the inadequacies in regulations of traditional taxi”

“In nature, the traditional taxi and GrabCar are the same However traditional taxi is under 13 regulations of the type of passenger transport business by Taxi, but GrabCar is not It can change the cost of trip, don’t need the permission of management agency GrabCar is under regulations that are very open Traditional taxi and 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 Grab company 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, restricting private vehicles in big cities Drivers can make more money, and passengers have more selection for journeys with cheap price However, these purposes are being changed, it is not sharing economy, Uber and Grab have become the main job with the appearance of thousands of professional drivers”

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

4.4 Conclusion

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

The launch of GrabCar service has impacts significantly on Vietnam transport market, especially the taxi industry Traditional taxi companies have changed their business strategy since the launch of GrabCar, they have offered a taxi service that has better quality for the customer, or some companies have launched a vehicle booking app on the smartphone which is similar to Grab's app As a result, customers have benefited the most from these positive changes The emergence of GrabCar service also has shown that, in the 4.0 technology era, besides building a new legal regulation for the operation of GrabCar service, current complicated business conditions of traditional taxi need to be removed to create a fairer and more competitive 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 qualitative interviews 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 2019 with the participation of 4 respondents (3 female and 1 male) who are the staff of VJU, in which, 3 respondents use Grab frequently for their trips, 1 respondent only uses Grab on some occasion; 2 people in middle age (43 years old) and 2 young people (28 years old) The interview was organized at VJU and took place within 1 hour 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 and opinion of the respondent about problems which relate to the operation of RHS Main questions are prepared before the interview take place The interview is a free-flowing conversation between the interviewer and respondents Respondents, besides answering questions, may share freely their thought, assessment, and

perspective about relevant issues In the interview process, sub-questions may arise continuously 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 particular assumption 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 situations such as bad weather or the peak-hour?”

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

 What is your trip purpose when using Grab service?

 Does everyone use Grab every day?

 After Grab appears in Vietnam, do you still use traditional taxi or not?

 Which time do you use Grab during the day? Which day of the week?

 What are the important factors when you choose Grab?

 How does your purchase demand change after Grab appeared in the market? Does it stimulate your purchase demand or not?

 After using Grab, how does your travel expense change?

 How do you assess about price calculation mechanism of Grab in some special situations such as bad weather or the peak-hour?

 How do you think about the waiting time when using Grab in peak hours? And you can accept how long is waiting time?

 Does everyone use Grab as a paratransit mode?

 Does Grab change your trip pattern or not?

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 the smartphone Data can gather from 1 vehicle booking times on the app including availability of ride-hailing vehicles, price of each trip, and the waiting time over period 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, thereby clarifying why the surge pricing always happens in bad conditions such as the peak-hour or rainy day

Figure 5 The availability of ride-hailing

on 5 minutes 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 below:

Table 2 The detailed information of survey days

Day of week Survey day Temperature Precipitation

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

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

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 in residential area and destination is in the agency/office area The detailed O-D pairs

on each zone are listed below

Table 4 The O-D pair

Zone 3

Zone 1

Zone 2

1

Origin: 64 Nguyen Khiet

Destination: Hanoi Tower

2

Origin: Royal city

Destination: 278 Ton Duc Thang

Origin

Destination

Origin

Destination

In order to avoid the bias of the survey result, do not apply the promotion or the cashless payment for all trips Using promotion or cashless payment make the real price 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 take place 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 using Grab 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

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)