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|Mai Linh's motorbike taxi fleet reached 10,000 in just five months. Source: mailinh.vn|
Mai Linh Corporation and Japan-based Willer Group on June 12 signed a Memorandum of Understanding in Tokyo city about improving road safety and handling traffic congestions in Vietnam.
Speaking at the signing ceremony, Ho Huy, Mai Linh Corporation’s general director and chairman of the management board, said that the cooperation aims to apply new technologies in transport activities, such as ordering vehicles via phone applications, card payments, developing and running coach stations, and parking lots in accordance with Japanese standards for road safety.
Last month, Mai Linh and Singapore-based IDOOH Pte., Ltd. signed a cooperation agreement to develop advertising via tablets installed in Mai Linh’s taxies.
Accordingly, in 2018 Mai Linh expects to install touch screens in 1,000 taxies in Ho Chi Minh City. This will create entertainment experiences for its customers, such as listening to music, playing games, and even doing shopping during the trips.
Earlier this year, Mai Linh sent documents to the National Assembly’s Committee on Social Affairs, the Ministry of Finance (MoF), and Vietnam Social Insurance to request help.
|In 2017, the firm’s revenue reached VND1.039 trillion ($45.7 million), the lowest in the last four years. Furthermore, the firm had to cut over 6,000 staff and its major revenue came from selling vehicles.|
The document stated that Mai Linh Corporation and other transport firms are facing difficulties from the unfair competition with Grab and Uber (at the time Uber had not withdrawn from the Vietnamese market yet). Specifically, uneven business conditions between traditional taxies and their tech-savvy rivals have thrown a wrench into the firm’s plans.
Accordingly, Mai Linh’s revenue dropped by 30 per cent against the previous years before Uber and Grab entered the market. As of October 31, 2017, its total debts, including social insurance, health insurance, and unemployment insurance, were over VND180 billion ($7.92 million), including VND150 billion ($6.6 million) in principal.
At the risk of losing dozens of thousands of labourers as well as market share, in the document Mai Linh requested the various bodies to support the firm to resolve its immediate difficulties to allow it to maintain its business.
As soon as Uber withdrew from Vietnam in April 2018, the domestic ride-haling market has heated up with news of the entry of new brands like FastGo and Go-Jek, as well as the renovation of old brands like Vinasun and even Mai Linh.
Late last year, trying to find a way out of its mounting difficulties, Mai Linh launched its new technology ride-hailing product Mai Linh Bike. Under the scheme, drivers receive 85 per cent of the revenue from passengers, and Mai Linh receives a remaining 15 per cent, lower than Uber’s 25 and Grab’s 20 per cent commissions.
Uber’s withdrawal will also benefit Mai Linh as the number of applicants to drive under its ride-hailing banner has skyrocketed. Five months after launching Mai Linh Bike, the firm’s number of motorbike taxies has reached 10,000 and expects to hit one million by 2020.
In the face of Grab’s dominance, changing business methods to gain a foothold in the market is the inevitable step. However, to recover market share in Vietnam, Mai Linh may need to change even more because it will have to take the fight not only to Grab, but also to new brands like FastGo and Go-Jek.
These new competitors also supply motorbike transportation services and other facilities. Maybe the way ahead for Mai Linh would be to differentiate itself from its competitors to carve out its own segment in the market.