Vinasun drivers at Tan Son Nhat International Airport. — VNA Photo
Changes in its business model and operation helped taxi firm Vinasun avoid bankruptcy last year.
According to the firm’s chairman Dang Phuoc Thanh, they have also boosted performance in the first three months of this year.
2018 was a tough year for Vinasun (HoSE: VNS) and other Vietnamese taxi firms as their market shares were narrowed due to the strong growth of the ride-hailing company Grab.
Last year, Vinasun’s total revenue dropped 29 per cent to VND2.07 trillion (US$89 million) and its post-tax profit halved to VND89 billion.
Thanh said at the firm’s recent annual shareholder meeting that since the appearance of Grab in Viet Nam in early 2014, the Singaporean ride-hailing business has grown strongly and taken over the passenger transportation market.
Meanwhile, the legal framework has remained underdeveloped and is not matching the growth of the market as well as customer demand, Thanh said.
“Operation conditions for taxi firms and ride-hailing businesses must be equal and regulations over the service must be strict enough to make sure passenger’s safety comes first,” he said.
In late December 2018, Vinasun won a court with Grab when the Vietnamese firm alleged Grab as the sole factor for its earnings decline.
Vinasun demanded Grab to compensate VND41.2 billion. However, the court ordered Grab to pay only VND4.8 billion.
The court decision shows there’s still inequality in the way Vietnamese companies are treated against foreign firms, according to Thanh.
To improve its competitiveness in the transportation industry, Vinasun has developed its own booking application and learn new things to perform better.
Individual income for drivers is another important issue for local taxi firms. Thanh said the company wants to secure its driving staff so it allows drivers to franchise the cars and supports parts of financial expenses for drivers in advance.
In the first quarter of 2019, Vinasun recorded an annual increase of 7.2 per cent revenue, which reached VND534 billion. Of the figure, taxi drivers contributed VND463 billion, up 12 per cent year on year.
Its post-tax profit almost tripled to VND32 billion from VND11.6 billion in the first quarter of 2018.
In 2019, Vinasun eyes 3.2 per cent and 11.8 per cent increases in total revenue and post-tax profit. The figures are projected at VND2.14 trillion and VND99.6 billion, respectively. — VNS