Vinasun seeks $1.8m compensation from Grab for ‘losses’

Thursday, Oct 25, 2018 08:30

Traditional taxis in HCM City. — VNS File Photo

At a trial in HCM City on Tuesday a government prosecutor said ride-hailing company Grab’s operations have caused losses to taxi giant Vinasun.

The People’s Court has been hearing a lawsuit for compensation filed by Vinasun against Grab on the grounds of unfair business practices.

Vinasun has said Grab’s operations have caused it losses of around VND41.2 billion (US$1.8 million) in 2016 and 2017

It accused Grab of predatory pricing and abusing the Ministry of Transport’s Decision No 24 on piloting contracted passenger transportation.

Grab claims to be a technology firm but is indeed a taxi transport company with a large number of drivers which has caused it losses, Vinasun has contended.

A lawyer from the HCM City People’s Procuracy backed the claim that Grab’s operations have caused losses to Vinasun.

According to a report by Quoc Viet Research & Consulting Co., 74 per cent of Vinasun’s customers have switched to Grab due to its lower fares and promotions.

Grab admitted to the court that its turnover has been rising steadily from VND1.5 billion in 2014 to VND758 billion last year as has the number of passengers.

The court will pronounce its verdict next Monday.

At the trial, on October 18 Truong Ðinh Quy, deputy director-general of Vinasun, had said the law and the Government’s Decree 37 "clearly state that the duration of promotions during a year is capped at 90 days and each programme at 40 days".

But Grab’s promotion deals and discounts had been “rampant”, akin to the practice of “dumping” of manufactured goods, he alleged.

Vinasun has also claimed that while it needs to follow 13 regulations as a taxi operator, Grab only has to follow three, creating unfair competition.

Quy said his company was ready to fight Grab to the end in a “legally transparent” manner.

Grab has told the court Vinasun’s allegations are baseless and its evidence and methods of calculating are dubious, and on these grounds the lawsuit should be rejected. — VNS.

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