App-based taxi services accelerating in Vietnam, traditional taxis hit the brakes

"In the past, I could easily earn 150,000 Vietnamese dong (6.73 U.S. dollars) every day. However, since people keep calling GrabBike for a better fare, I have had no customers in the past two days," a Minh said, looking visibly worried.

According to Grab Vietnam, clashes between its drivers and traditional taxi drivers usually happened at airports, train, coach or bus stations. Statistics by Grab showed that from late 2015 until now, as many as 65 conflicts between GrabBike and traditional drivers have been reported.

The new service, however, has been warmly welcomed by local customers, especially as smartphones are rapidly growing in popularity in Vietnam.

Phan Thu Phuong, 20, a second-year student in Hanoi told Xinhua that she prefers using Grab as it charges more reasonable price than traditional motorbike taxis and she do not need to bargain with the drivers.

"The prices provided by GrabBike are affordable to a student with a tight budget like me. What I like most about using GrabBike is that I don't have to haggle. The price shown on the app is fixed and everything is transparent before I press book,'" said Phuong.

In addition, being provided with photos, names, and motorbike plate numbers of each driver, brings Phuong a sense of security and credibility.

"Instead of asking a stranger on the street to give me a lift, as is the case with traditional motorbike taxi drivers, with GrabBike, I know in advance who is going to pick me up, including the driver's age, face, name, and the bike's plate number, which makes me feel more comfortable about traveling," the young girl told Xinhua.

According to a survey carried out by Zing, an online local newspaper, 87.55 percent of respondents said that ride-hailing apps like Grab help customers to travel at a cheaper price.

Local transportation experts recommended that traditional motorbike taxi services should increase their quality of service and lower their fares if they are to compete in the rapidly developing industry.

In Vietnam, like Grab, another app-based ride-hailing service called Uber has also put forward a proposal to manage and connect passenger transport by contract on a trial basis, to the country's Ministry of Transport (MoT).

However, only Grab has been approved to pilot the ride hailing app-based service over two years, from Jan. 2016 to Jan. 2018 in five localities in Hanoi, the southern economic hub of Ho Chi Minh City, central Da Nang city, northern Quang Ninh and the south central coastal Khanh Hoa provinces.

According to Vietnamese MoT Deputy Minister Nguyen Hong Truong, the application of information technology to connect customers with transportation companies, as Grab and Uber are doing, is a good innovation.

It has many advantages, including helping change traditional transport business methodologies, and make transport contracts and fees become more transparent.

Pointing out the differences between Grab and Uber, Truong said that in fact, Grab uses cars and motorbikes with registered plate numbers, which provide a safety net for both drivers and customers.

Meanwhile, Uber uses free cars and motorbikes to join the app-based transportation system. In order to be approved, Uber should have registered to work as a legal transportation company that can be checked at any time and easily managed on the system, said Truong.