VinGroup’s GSM Taxi vs. Grab: The Battle between Giants

Welcome to Vietnam Untold. Today, we have an exciting story of a battle between giants, a Goliath vs Goliath scenario, as the new taxi operator GSM, owned by VinGroup, takes on the ride-hailing behemoth Grab. 

In the ever-evolving world of transportation, Vietnamese taxi operators Vinasun and Mai Linh have faced ongoing struggles with the rise of disruptive ride-hailing companies like Uber and Grab. However, amidst this challenging landscape, Vingroup’s GSM Taxi, under the visionary billionaire Pham Nhat Vuong, is likely poised to stand out as an exception.

Pham Nhat Vuong, the chairman of the Vingroup conglomerate and VinFast electric vehicle manufacturer, brings a remarkable track record and a determination to revolutionize transportation in Vietnam. GSM Taxi, operating under his guidance, has become the talk of the town.

What sets GSM Taxi apart is its exclusive use of VinFast electric cars. While the domestic taxi market is teeming with over 200 players, GSM Taxi is the first to dare and adopt an all-electric fleet.

According to a report by Mondor Intelligence, the Vietnam taxi market was valued at $410 million in 2021, with predictions of reaching an impressive $790 million by 2027, boasting a compound annual growth rate of 10.25%.

GSM’s CEO, Nguyen Van Thanh, has remained tight-lipped about whether the company aims to become a super app, choosing instead to focus on delivering exceptional electric rental and ride-hailing services. The company has already secured rental contracts with brand Lado Taxi, demonstrating its commitment to expanding its presence.

However, there are challenges ahead. Analysts caution that the local market may not be fully prepared to embrace the electric revolution just yet. The capacity to accommodate 10,000 electric cars remains uncertain, and the availability of charging infrastructure poses a significant hurdle.

Transportation expert Prof. Dr. Nguyen Hong Thai predicts that the introduction of electric taxis will undoubtedly impact the market share of taxi operators. He foresees a significant shift of customers in VinGroup’s residential and commercial buildings to the new service, driven by their desire for a superior ride experience at a higher price.

As a taxi operator, GSM Taxi provides vehicles and offers fixed salaries to drivers, along with enticing commissions based on their monthly revenue. While it presents an enticing proposition, thriving in this cutthroat industry will require sustained long-term investments, as even industry giants like Grab and Gojek have struggled to turn a profit after over a decade of operation.

With a fleet of 1,200 EVs, a fraction compared to the thousands of ride-hailing cars, some may wonder if GSM Taxi will have enough presence where customers demand. However, as the car manufacturer itself, GSM is well-positioned to add more vehicles in the future.

While some skeptics view Vingroup’s introduction to the taxi service as a clever way to promote VinFast EVs, the CEO of GSM Taxi has assured that they are actively exploring expansion opportunities in other Southeast Asian countries.

Only time will tell if VinGroup’s taxi service will be successful. With numerous challenges ahead for billionaire Pham Nhat Vuong, the outcome remains uncertain.

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