Rail, Road & Other Transport

Court delays Vinasun Lawsuit against Grab

Date: 03 December 2018; Type: Industry Updates; Source: Vietnam News Agency

HCM City, Dec 3 (VNS/VNA) - The Ho Chi Minh City People’s Court has adjourned trial proceedings brought against ride-hailing service Grab by Vinasun taxi company, which has accused Grab of unfair business practices and demanded compensation of 41.2 billion VND (1.75 million USD) for losses it has suffered.

The trial, which has been postponed four previous times, would be delayed for one more month, with the next date to be announced soon, the court said. The two parties told the court that they wanted to adjourn to consider the matter further.

Before the trial reopened on November 30, both Vinasun and Grab had submitted requests to delay the trial but a detailed plan for discussion between the two parties was not clear, so the court decided to hold the trial.

“The lawsuit has taken a very long time and we’re both tired. We would like to stop the trial for more discussions with Vinasun to seek a way to work and develop together,” a Grab spokesperson said at the court.

A Vinasun representative said: “Vinasun sued Grab because we would like to have a healthy business environment, but we’ve agreed to have more discussions with Grab.”

Vinasun, once a dominant player in the taxi market in the south, has seen its market share gradually taken away by Uber and Grab since 2016.

About 2,700 of its taxis are idle because of unfair competition, it said.

Grab, which acquired Uber in Vietnam earlier this year, continues to grow in popularity as the number of smartphone users in the country has steadily risen.

Vinasun told the court that Grab’s “illegal” operations caused losses of 41.2 billion VND in 2016 and 2017 for the traditional taxi company.

Vinasun based its complaint on the Trade Law and the Government Decree 37 issued in 2006 which states that the duration of total promotions in a year must not exceed 90 days and each promotion should not last more than 40 days.

The Vinasun representative said that Grab had exploited the lack of clear regulations for software-based transport services, and had offered “rampant” promotion deals and discounts, including “zero fee” trips, activities that could be described as similar to the dumping of manufactured goods.

According to a survey conducted by market research company Quoc Viet, 74 percent of Vinasun customers have moved to Grab due to low fares and frequent promotions.

In addition, Vinasun said that it must comply with 13 regulations, but that Grab only has to follow three, creating unfair competition.

At previous trials, Grab had asked for adjournment because Cuu Long Company, which was in charge of assessing losses suffered by Vinasun, was not represented in court.

Grab said that identifying the losses would be important and would affect the entire trial.

According to a report from the Ministry of Finance, in the 2014-2017 period Grab announced losses of more than 1.7 trillion VND (74 million USD) while its registered capital was only 20 billion VND (870,000 USD).

A crowd of drivers from Vinasun and Mai Linh, another well-known taxi company, waited outside the court on November 30, anxious to know the outcome of the trial.

Analysts said that online businesses like Airbnb in Vietnam could be vulnerable if Grab is eventually penalised.

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