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BUSINESS REPORT

viding a significant customer base for ride-
hailing service providers.
The southern city has also been wit-
nessing a rapid increase in traffic jams.
According to the National Traffic Safety
Committee, traffic congestion causes an
estimated $6 billion in damage to the city
each year. Meanwhile, its population is
expected to rise significantly in the short
and long terms, while it is also predicted
to witness significant growth in internet
use as a result of its rising population.
The city’s average population stood at
nearly 9.38 million in 2022, figures from
Road to popularity the General Statistics Office reveal. The Ho
Chi Minh City Department of Information
and Communications has estimated that
90 per cent of local residents will use broad-
Vietnam’s ride hailing market is expected to boom given the
band internet by 2025, which will have a
rise of internet access and lack of public transport options. positive impact on ride-hailing services.
The government is encouraging the
use of electric vehicles as a key solution to
By NAM NGUYEN
deal with transport challenges. It has also
set a target of reducing greenhouse gas
emissions and traffic congestion while
ccording to Mordor Intelligence’s demand for convenient transport options, improving the living conditions for people
Vietnam Ride Hailing 2024 report, especially among city commuters and young in urban areas. Such efforts will help mit-
A the size of Vietnam’s ride-hailing professionals. Car travel provides a comfortable igate the impact of climate change and
market is expected to reach $880 million mode of transport that caters to the changing facilitate the expansion of ride-hailing
this year and $2.16 billion by 2029, for a preferences of Vietnamese consumers. services in the city.
compound annual growth rate (CAGR) of Hatchbacks, sedans, SUVs, and MPVs VinFast, which is now listed on the
19.5 per cent during the 2024-2029 period. as well as more luxurious cars are among NASDAQ stock exchange, is actively pro-
With a rapidly-growing urban population the popular passenger vehicles provided moting the application of electric vehicles
and a general lack of quality public transport by major ride-hailing providers in the in Vietnam’s ride-hailing industry. The
services, demand for ride-hailing services market, with sedans accounting for the company offers discounted prices and
has increased steadily in recent years. majority in 2023. The increasing appearance interest-free loans for purchases of electric
The increasing preference in the popu- of electric vehicles across Vietnam has motorcycles, to encourage their greater
lation for travel in personal vehicles, driven also had a positive impact on the ride- use. However, investors are carefully study-
by rising demand for convenience, and an hailing market. ing the company’s ability to expand its
increasing number of tourists in Vietnam In 2022, the total number of vehicles electric vehicle production scale and earn
have been key factors behind the develop- sold in Vietnam reached 358,000, including profits from these initiatives.
ment of the country’s ride-hailing market. 284,000 passenger vehicles. According to the Mordor Intelligence
Higher demand for travel and the Ride-hailing services have helped report, Vietnam’s ride-hailing market is
emergence of a young population with enhance convenience for customers. With now at a moderate level with the participation
sound knowledge about technology have just a few taps on a smartphone, passengers of companies such as Grab, Green SM, Be
also promoted the use of tech-based ride- can readily book a vehicle, keep track of Group, Go-Viet, and FastGo. The biggest
hailing apps in Vietnam, in particular the driver’s location in real time, and pay competitor to Grab in the future may well
platforms such as the Green SM electric for the trip online. be Green SM, which is the first domestic
taxi company, Grab, and Gojek. Vietnam’s internet coverage reached electric taxi company in the country. Green
Moreover, both the ride-hailing and nearly 80 per cent in 2023, with use being SM is actively expanding its presence through
delivery market have become more com- primarily on mobile devices. strong partnership development, and has
petitive as a result of the increasing use of The rapid expansion of green trans- collaborated with several taxi companies
smartphones, driving up demand for digital portation nationwide and the rise in demand around Vietnam, including Lado Taxi, Son
services. Many players have focused on for ride-hailing services are forecast to Nam, Thanh Ha Transport, ASV Airport
launching new services and investing in further boost market growth. Some domestic Taxi, En Vang, and Sapa Green Taxi.
expanding routes and deliveries as well as companies are building different business Others in the market have been involved
digital financial services. strategies to increase their market share. in mergers and strategic cooperation activities
In December, Green SM officially Last October, the Green & Smart Mobil- while also launching new products and serv-
launched its Green Express delivery services, ity JSC and Green SM also launched ices to outperform their competitors. Last
using e-bikes, via the Green SM app. The electric taxi services in Laos, with a fleet July, Grab announced its intention to acquire
service has been rolled out simultaneously of 150 VinFast electric vehicles. all of Trans-cab Holdings’ shares, which
in five cities and provinces where Green SM App-based ride-hailing services have would include Trans-cab’s rental car and
electric vehicle services are already operating. become an indispensable part of daily life taxi operations, maintenance workshop, and
Vietnam’s rising urban population and in Ho Chi Minh City, the most populous gas station activities, which will now be
higher disposable incomes have led to growing city in Vietnam, over the past decade, pro- carried out through a subsidiary of Grab. %

en.vneconomy.vn April 15, 2024 Vietnam Economic Times 39