Imagine opening an app on your phone and order a car or a motorbike that would pick you up and take you to your destination. Just a few years ago, that scenario seemed like a pipe dream for Vietnamese people. Yet, today, with the advent of ride-hailing services such as Uber and Grab, it has become a regular part of many people’s lifestyles.
So how exactly did Grab and Uber achieve such monumental success in such a short amount of time? Do they demonstrate sound business acumen, while capitalising on your opponents’ mistakes?
Grab and Uber quickly assembled a considerable workforce with effective recruitment tactics. For example, the promises of high income and flexible hours evidently attracted a large number of eligible employees, many of whom earned less at their previous jobs or were unemployed. At the end of 2016, there were 24 thousand registered drivers for Grab and Uber in Ho Chi Minh City alone – a larger number than anyone’s expectations.
A business is only as profitable as its customers- a business’s success is measured by its customers’ satisfaction. Both Grab and Uber have done a commendable job of accommodating their customers with competitive pricing, good service, and a strong after-sales service presence. These companies are continuing to grow at a significant rate, fending off competition from traditional taxi firms and motor taxis, which have been disliked for the stagnation and complacency. The common reports of overpricing and reckless driving have casted a bad reputation over motor taxi drivers. Meanwhile, the once de facto monopolies such as Vinasun or Mai Linh have long neglected the improvement of their services.
As with any other innovation, there have been backlashes against Uber and Grab.“Traditional” motor taxi drivers are threatened by GrabBike and UberMoto, while taxi companies are losing market shares to Grab and Uber. Multiple violent altercations have been reported between motor taxi drivers and GrabBike (or UberMoto) drivers. Some taxi companies have launched (and failed to launch) multiple ‘smear campaigns’ against Grab and Uber, claiming that these companies are evading taxes and harming the local economy.
The transportation wars, so to speak, is just beginning to heat up. And as more players are looking for their slice of pie, a fierce competition is to be expected. One thing’s for sure: it’s going to be interesting, as a customer, to see how this all plays out in 2018.