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With Uber gone, Aber and others rush into Vietnamese market

Authorities encourage ride-hailing newcomers to challenge Grab's dominance

Aber, one of Vietnam's newest ride-hailing operations, uses German technology. 

HO CHI MINH CITY -- Two months after Grab's acquisition of Uber's business in Southeast Asia, Vietnam is seeing a number of new ride-sharing platforms, both foreign and local, including existing taxi operators keen for a slice of the growing market.

Earlier in June, the Aber app was launched in Ho Chi Minh City, Vietnam's biggest market for ride-sharing platforms. Aber was developed by a group of young Vietnamese engineers studying in Germany, and is due to launch in Hanoi, the capital, by the end of the month. Along with Grab and Uber, Aber has promised not to raise charges during rush hours, a policy some users criticise.

Aber offers six services: Aber Bike, Aber Car, Aber Truck, Aber Travel, Aber Business, and Aber Express. Aber Travel targets local and foreign tourists since the driver also serves as a city guide. The company is teaching English and tour skills to drivers, according to Huynh Le Phu Phong, its business development director. Last year, international arrivals to Vietnam increased 29% year on year to 13 million people.

Aber's name is short for Am Besten Fahrer in German, or Absolute Driver in English. The system has a German technological platform with its own map that is not dependent on Google. Huynh said the startup has the technology, financing, and human resources to grow, and plans to expand into neighboring markets by 2020.

Google recently reported that Southeast Asia's ride-hailing market has grown fourfold since 2015, and will be worth $20 billion by 2025. Grab is the biggest player at present, and is available in some 200 cities following the Uber acquisition.

Vietnam is seeing faster growth in the sector than other parts of Southeast Asia. According to the transport ministry, the number of companies offering services through Grab and Uber has risen from 233 to 491 in the last two years.

Domestic startups as well as regional players are rushing into the market. On Monday, Indonesian popular ride-hailing service Go-Jek announced the opening of its unit in Vietnam.

Meanwhile, Fastgo is a ride-hailing app from Mpos Vietnam Technology , a subsidiary of Nexttech, a Vietnamese technology group involved with e-commerce, e-logistics, and fintech. It has been introduced in Hanoi, and aims to have five million users and 20,000 drivers by 2020, with operations in eight major cities offering taxi and limousine services.

VATO, an app developed by Phuong Trang transport company, is due to enter the market by the end of June. More than a dozen operators will soon be competing. Indonesia's Go-Jek, China's Didi Chuxing, and Singapore-based MVL have all announced plans to enter Vietnam in the second half of the year.

In Vietnam, Local regulators have encouraged startups and existing taxi operators to launch their own apps to challenge Grab's dominant position. "We expect Vietnamese operators to introduce similar apps to compete fairly in the market," said Nguyen Hong Truong, the former deputy minister of transport.

Grab is facing some legal headwinds over the Uber merger. Hanoi launched an investigation into the deal in April. Grab said that its market share in Vietnam remains below 30%, meaning it does not have to notify the Vietnam Competition Authority (VCA). In May, however, VCA put Grab's market share at over 50%, and has forwarded its findings to the trade and industry ministry for consideration.

On June 23, the transport ministry turned down Grab's request to launch pilot programs in cities like Ninhthuan, Dongthap, and Gialai. Grab has been allowed 5-year programs running until 2020 in Hanoi, Danang, and Ho Chi Minh city, as well as Quangninh and Khanhhoa provinces. However, the city authorities have not yet allowed it to operate officially in Danang.

Some analysts doubt that local apps can compete with the foreign competition given their strong investor backing and finance. Vietnamese players have come too late to the market, according to Tran Hong Ninh, chairman of Auto Hospital, which trains drivers to use the new software.


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