Vietnamese Tiếng Việt | Saturday, September 22, 2018 | Advertise with Us
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Is there an end for Uber in Vietnam?

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Analysts believe that Uber is in big crisis, with Uber Vietnam confirming the resignation of Dang Viet Dung from the post of CEO.

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In August 2017, Uber increased the taxi service rate from VND7,000 to VND8,500 per kilometer in HCMC and the maximum discount rate for drivers at 25 percent. 

The decision faced strong opposition from the community of drivers. Many of them called on their colleagues to leave Uber for Grab.

In late September, the HCMC Taxation Agency decided to impose a fine and collect tax arrears of VND66.8 billion, or $3 billion from the company. Uber Vietnam was accused of making wrong declarations about the tax sums it had to pay.

When the decision was made, rumor spread that Uber Vietnam would stop operations. However, Dung at that moment denied it. He said that Uber Vietnam, together with the holding company in the Netherlands, were working with the taxation agency to clarify existing problems.

Also in September, Nguyen Anh Tuan, president of Grab Vietnam, the biggest rival of Uber, stated that Grab Vietnam had obtained large market share, implying that Grab had beaten Uber.

Meanwhile, Uber Vietnam has met with many difficulties recently. In August, the Da Nang City Transport Department issued a notice banning Uber operations.

Uber global is also facing problems. The CEO was changed in mid-stream, while investors have reduced investments. In addition, it got involved in Google’s robocar lawsuit which analysts say may kill Uber’s future.

Dung, the former CEO of Uber, admitted that Uber could not succeed in luring customers. One of the mistakes it made was in the marketing strategy.

Uber Vietnam followed the Pull Marketing strategy and created content for a long period. However, later, Dung realized that the strategy was reasonable only if it had targeted customers with credit cards.

An analyst commented that Uber Vietnam made a critical mistake when copying the model applied by Uber in other markets and targeting customers with credit cards. The number of Vietnamese people using credit cards is modest.

Grab, which also came to Vietnam in 2014, immediately accepted payment in both card and cash. Uber only began doing so in August 2017.

When Grab began launching a delivery service in March with Grab Express, Uber Deliver was launched in September.

The analyst said Grab is beating Uber because it ‘understands local value’. 

Source: VietNamNet

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