Hanoi not convinced Grab hasn't formed a monopoly

Vietnam among S-E Asian nations worried that buyout of Uber will kill competition

HANOI • Uber's withdrawal from South-east Asia is expected to redraw the ride-hailing markets in countries including Vietnam, even as the local authorities said Grab has not provided adequate evidence to prove that it has not formed a monopoly in Vietnam.

Grab, in a letter submitted to Vietnam's Ministry of Industry and Trade last Thursday, said its combined market share with Uber in Vietnam is less than 30 per cent, so it does not have to "inform the competition authority before proceeding and completing" the acquisition of rival Uber's operations in Vietnam, according to a report on Monday on VnExpress.net.

However, the ministry's Competition and Consumer Protection Department has notified Grab of the country's Competition Law, which states that a company that acquires a combined market share of between 30 per cent and 50 per cent without informing the competition authority will be fined 10 per cent of its preceding fiscal year's total revenue.

Mr Do Thang Hai, Deputy Minister of Industry and Trade, had told VnExpress in a recent interview that there is a chance Grab will be punished after the authorities have fully considered the company's report on the Uber deal.

"Vietnamese drivers and consumers' interests will be guaranteed under the competition law," said Mr Hai.

Many Uber drivers have said the Grab takeover was bad news since their incomes would be affected.

Some said that, in the past with competition, they could ask Uber for higher commissions.

Now, they would have no choice but to take whatever was on offer from Grab.

Many Uber drivers have also borrowed from banks to buy a car or cars to become the company's full-time employee.

With Uber's demise, they are set to lose their jobs if they are not taken on board by Grab for whatever reason.

Customers also fear that promotion programmes may be reduced or even stopped since Grab now appears to have a monopoly in the market.

An official from the Vietnam Standards and Consumers Association said that Grab might start manipulating prices in a market in which it has no direct rivals.

But many analysts have dismissed such fears, saying Grab would not be in a position to abuse its apparent monopoly.

The scramble by local transport companies to enter the tech-based taxi market in recent times means they would provide enough competition to Grab, and dissuade it from harbouring notions of monopoly abuse, analysts said.

Another, and more important, reason is that the governments of several countries which may be affected by Grab's monopoly, including Vietnam, have indicated they will not allow any possible anti-competitive behaviour by Grab.

Grab's deal to acquire Uber has also drawn immediate and careful scrutiny from regulators in Malaysia, Singapore and the Philippines.

Experts have also noted efforts by Vietnamese transport companies to invest in technology to seize the opportunity to develop their business after Uber's withdrawal from the market.


A version of this article appeared in the print edition of The Straits Times on April 11, 2018, with the headline 'Hanoi not convinced Grab hasn't formed a monopoly'. Print Edition | Subscribe