Grab Vietnam managing director on new car-hailing regulations, impact from COVID-19

In January, Grab appointed Nguyen Thai Hai Van as its managing director in Vietnam, one of the most important markets in the region. Van will oversee Grab Vietnam’s business strategy and operations as the company shapes its platform into a super app.

Grab announced in August 2019 that it will make an investment of USD 500 million for Vietnam over the next five years. The company has been expanding aggressively across verticals in the country and has cultivated ties with government stakeholders through transport and social projects.

KrASIA had a chat with Nguyen Thai Hai Van about Grab’s compliance with the country’s new car-hailing regulations and its recent announcement of a VND 70 billion (USD 3 million) relief package for drivers and partners to weather the effects of the COVID-19 pandemic.

KrASIA (Kr): Starting from April 1, Vietnam has officially legalized car-hailing services (Decree 10) after several years of debating whether providers such as Grab should be subjected to the requirements imposed upon other transportation businesses. How will this affect Grab’s operations in Vietnam, particularly the GrabCar service? 

Nguyen Thai Hai Van (HV): I think this is a historic piece of legislation. Throughout the years, all relevant authorities and government agencies worked very closely with businesses such as ours to get insights and recommendations. That process lasted much longer than expected.

Grab has been very much looking forward to this date. Car-hailing services can now be provided in all 63 cities and provinces in Vietnam, not just the five provinces that were part of a pilot program.

We believe Decree 10 will create a favorable environment for ride-hailing platforms to efficiently connect passengers with drivers, and better serve the commuting needs of all people in Vietnam. Millions of driver-partners, especially in the rural areas, will also be empowered to elevate their quality of life through ride-hailing. Meanwhile, transport co-ops across Vietnam can partner with ride-hailing platforms to manage their drivers and vehicle fleets more efficiently.

The decree is more open, recognizing three types of transportation businesses that can provide services for passenger cars under nine seats. All companies that provide taxi services, contract car services, and those that host applications to connect drivers and users can operate under this mandate. We believe that this will create opportunities for many businesses to participate in the sector.

Kr: The debate has consistently revolved around whether Grab is a technology platform or a transportation company. Which business model does Grab need to choose to operate in Vietnam and still fully comply with this decree? 

HV: Grab will continue to operate as a multi-service tech platform. For the GrabCar service in particular, Grab is working on getting a license to provide transportation services.

Grab has been working closely together with the Ministry of Transport and the local departments to ensure that Grab and its transportation partners fully comply with Decree 10. Among the available options, applying for a transportation business license for GrabCar will allow Grab to fully comply with Decree 10, and continue to serve passengers and driver-partners with minimal disruptions. Grab will continue to work closely with transport co-ops to support driver-partners to comply with Decree 10.

Applying for a transportation business license under Decree 10 does not mean that there’s a significant change for our services or operations. Grab remains a technology company providing ride-hailing services. Passengers can continue to book ride-hailing services through the Grab app, as before. Driver-partners, who will remain members of the transport co-ops, can also continue to use their cars to provide electronic contract-based passenger transportation services through the Grab app.

Kr: This is a difficult time for all businesses due to the spread of COVID-19. Yesterday, the Vietnamese government banned all types of passenger car services in the country from April 1 to 15. Can you comment on Grab’s plans as we move forward? 

HV: We have been closely monitoring the situation and cooperating with all relevant authorities in Vietnam to help control the epidemic. Secondly, our goal is to ensure that we can continue to support our drivers and merchants during this very difficult time as demand for transportation has decreased significantly. Therefore, Grab just announced a relief package worth VND 70 billion, which includes donations to the fund at Vietnam’s Fatherland Front and to community workers at quarantine centers.

We will support drivers, those that are on our platform frequently, to ensure that they can be compensated to the same level of income they had before this epidemic. Grab will assist restaurant owners to ensure that the offline demand can be transferred to online. We are working very hard to safeguard the livelihoods of our partners, but also to provide suitable services for users at this time, such as GrabMart or GrabAssistant.

With regards to the expansion of our GrabCar service to more provinces and cities in Vietnam, it’s not something that we can do quickly. At this time, Grab is working with partners to research about the demand for this service in other parts of Vietnam. We are evaluating our options to be prepared when things get back to normal.

The interview was conducted in Vietnamese and translated to English.