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Vietnam Taxi Market - Growth, Trends, and Forecast (2019 - 2024)

  • ID: 4774938
  • Report
  • Region: Vietnam
  • 61 pages
  • Mordor Intelligence
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FEATURED COMPANIES

  • Aber
  • Go-Jek
  • Hoang Long
  • Mai Linh Group JSC
  • Taxi Navi
  • Vinasun Corporation
  • MORE
Market Overview

The Vietnamese taxi market is expected to project a CAGR of 14.89%, during the forecast period, 2019-2024.
  • The demand for ride-hailing services through technology application has been increasing continuously, after the implementation of pilot program Decision No. 24/QD-BGTVT, in January 2016, by Ministry of Transport (MoT) in Vietnam. Reduced taxi fare and ease of booking through mobile app are the major factors that driven the modern taxi service to capture a major share of the Vietnamese taxi market.
  • However, still vehicle booking through phone calling and hailing on streets, continues to operate as a major service among popular brands of taxi firms, like Mai Linh, Vinasun, Vinataxi, TaxiGroup, Hoang Long etc., and thus, the traditional taxi service had acquired a major share of the Vietnamese taxi market.
  • Among more than 200 taxi firms, the major taxi firms, namely Vinasun and Mai Linh are the major player of the Vietnamese taxi market. However, the entrance of Uber and Grab has affected the business of these players in the country.
Scope of the Report

Traditionally, a taxi or cab is defined as a vehicle for hire with a driver, used by a single or small group of passengers, often for a non-shared ride. However, with the development of new technology and developments in taxi services, the traditional definition of a taxi has evolved.

The Vietnamese taxi market has been segmented by service, vehicle type, and city.

Key Market Trends

Increasing Passenger Traffic is Driving the Ride-hailing Industry

In the new era of technology, Grab, and Uber are beating traditional taxis with just the click of a button. The demand for app-based taxi services is rapidly growing in Vietnam, which is hindering the growth of traditional taxi demand in the country. Easy registration and flexible working hours have drawn over 50,000 cab drivers to work for Uber and Grab in Vietnam, with many leaving traditional taxi firms in search of a better living. For instance; in 2017, Vinasun, Vietnam’s biggest traditional taxi operator lost 8,000 drivers, which is almost half of its employees, whereas its rival Mai Linh Taxi also lost 6,000 drivers.

The major taxi company Mai Linh has witnessed the lowest business profits in last five years. Another significant player, Vinasun has reported an approximately 50% drop in profit in 2017 due to the growing use of app-based taxis. According to Mai Linh, the company lost nearly VND 84 billion (USD 3.7 million) in 2016 after making a profit of VND 325 million in 2015. In 2017, Vinasun's gross profit was VND 205 billion, down 48% from 2016. The main reason behind these losses were robust competition and unfair taxation. For instance; Uber was paying a 3% value-added tax, whereas traditional taxi firms have to pay a 10% VAT and 20% corporate income tax. At present Uber keeps 20% revenue for a ride and pays 80% to the driver, which is why drivers are shifting from traditional to app-based taxi companies.

The app-based companies, such as Uber and Grab, got support from the public, as people said they were unhappy with inadequate and unreliable services provided by traditional taxi firms, such as drivers refusing to serve short distance or failing to show up regardless of clients' booking.

Cities that are Leading the Taxi Market in the Country

The demand for taxis in the country is growing from every corner, however, Ho Chi Minh City is leading the Vietnam taxi market, followed by Hanoi and other cities.

Ho Chi Minh has also experienced taxi vehicles surge on the city roads under the ride-hailing pilot program. By the end of 2017, the city taxi firms had fallen from 36 in 2010 to ~20. As of 2017, the number of taxicabs running in the city reached nearly 36,900, which included 8,900 unit of traditional taxi cabs (as of 2010, nearly 12,000 traditional taxis were operated, but the arrival of Uber and Grab resulted in cutting down ~3,000 traditional taxies in the city by 2017) and 28,000 units of modern taxi cabs (majorly operated by Uber and Grab companies). The overall taxicab number is anticipated to exceed the limit, i.e. ~14,500 by 2020 and ~16,500 by 2025, as stated under the city’s taxi management plan. Thus, similar to Hanoi city, the Department of HCMC Transportation has stopped licensing of new taxicab under the pilot program and further taxi fleet expansion by traditional taxi firms. Among taxi firms in the HCMC, Vinasun is the leading company that has covered a major market share of nearly half of the HCMC’s taxi market during 2014-2016. However, the overall revenue of the company has been slashing down, since the arrival of Uber and Grab in 2014, and by 2017, the company captured ~40% of the HCMC’s taxi market.

Hanoi market has been highly dominated by nearly 80 taxi firms. Among them, Mai Linh and TaxiGroup (operates two brands namely Taxi CP and Taxi Hanoi) are popularly used taxis in Hanoi city. While, Mai Linh holds the largest taxi fleet in Vietnam, with nearly 15,000 taxi cabs, where approximately 9,000 taxis running in Hanoi, and 6,000 in other cities of Vietnam.

Competitive Landscape

In 2018, Vinasun Corp. dominated the taxi market, followed by Grab, and Mai Linh Group. Both, Vinasun Corp. and Mai Linh witnessed a consistent decline in revenue. However, Vinasun Corp. is still accounting for a major share in the market, owing to its presence, of more than a decade, in the taxi industry.

In 2018, after Uber withdrew from the country, the domestic ride hailing market witnessed intense competition, with new brands, such as FastGo and Go-Jek entering the market, along with the renovation of old brands, such as Vinasun and Mai Linh.
Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Aber
  • Go-Jek
  • Hoang Long
  • Mai Linh Group JSC
  • Taxi Navi
  • Vinasun Corporation
  • MORE
1 INTRODUCTION
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Industry Attractiveness - Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry

5 MARKET SEGMENTATION
5.1 Service Type
5.1.1 Traditional Taxi Service (Offline Hailing)
5.1.2 Modern Taxi Service (Online Hailing and Sharing)
5.2 Vehicle Type
5.2.1 Motorcycle/Bike
5.2.2 Cars
5.2.3 Other Vehicle Types
5.3 City
5.3.1 Ho Chi Minh City
5.3.2 Hanoi
5.3.3 Other Cities

6 COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Mergers and Acquisitions
6.3 Company Profiles
6.3.1 Online Platforms
6.3.1.1 GrabTaxi Holdings Pte Ltd
6.3.1.2 Kyyti Group
6.3.1.3 FastGo
6.3.1.4 Go-Jek
6.3.1.5 MVLChain
6.3.1.6 Taxi Navi
6.3.1.7 VATO
6.3.1.8 Aber
6.3.2 Taxi Brands
6.3.2.1 Mai Linh Group JSC
6.3.2.2 Viansun Corporation
6.3.2.3 VinaTaxi
6.3.2.4 Hoang Long

7 MARKET OPPORTUNITIES AND FUTURE TRENDS
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  • Kyyti Group
  • Go-Jek
  • MVLChain
  • Taxi Navi
  • VATO
  • Aber
  • Mai Linh Group JSC
  • Vinasun Corporation
  • VinaTaxi
  • Hoang Long
  • FastGo
  • GrabTaxi Holdings Pte Ltd
Note: Product cover images may vary from those shown
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