The public is increasingly favouring new and modern taxi services including Uber and Grab taxis due to their better quality services.
Traditional services face tough price competition
Hanoi office worker Nguyen Xuan said, "I and my friends now mostly just use Grab Taxi because it has lots of discount programmes and cheaper than traditional taxi services."
After initial complaints about supposed regulatory violations, Uber Taxi has also been legally recognised and achieved great growth. The Vietnam Traffic Safety Committee said as long as Uber follow regulations, they would tolerate the firm.
Several experts said traditional taxi services would have to change amid tough competition. For example, most traditional service providers rapidly increase fare when fuel prices rise but are reluctant to lower prices when petrol prices fall.
Uber’s taxi fares are only VND5,000 (24 US cents) per km for a four-seat car, 45% cheaper than most traditional taxi services.
Khuat Viet Hung, vice chairman of the National Traffic Safety Committee said traditional services are wasting lots of money on the kilometres travelled without passengers. Meanwhile, due to the use of phone apps, Uber and Grab Taxi can quickly arrive at a passenger's location.