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On November 27, hundreds of Ba Sao taxi company’s drivers went on a strike to demand the board of directors to issue supporting policies as their revenues have plunged due to the overwhelming competition posed by Uber and Grab, according to vnexpress.vn.
Ba Sao drivers demand the company to provide support to keep them on the surface financially
According to drivers, their income has massively decreased. Notably, the average revenue of drivers in a 12-hour work shift is between VND300,000-500,000 ($13.21-22.01) per day, while the figure for drivers in 24-hour work shift is between VND600,000-800,000 ($26.41-35.22). After deducing expenditures for meals, insurance, petroleum, and communication, the remaining income is very low.
Thus, drivers ask the company to decrease communication expenses by VND500,000 ($22.01) per month instead of supporting them with a monthly VND50,000 ($2.2) per person.
Another driver shared that his income decreased by half since Uber and Grab appeared in Vietnam. Almost all drivers used loans from banks to buy cars, thus, their current incomes are not enough to pay loan interests as well as the expenditures for communication.
Vu Quoc Huy, director of Ba Sao, told that a number of drivers started to strike half a month ago and the board of directors invited them to the office to clarify their demands and persuade them to return to work, but failed. According to Huy, these drivers are kind by nature, but they may have been incited by unknown sources to conduct the strike.
Huy added that taxi companies, including Ba Sao, find it difficult to compete with Uber and Grab because traditional taxi brands are banned from numerous streets, especially during peak hours. Besides, the operation expenses of traditional taxis are higher than those of Uber and Grab.
Aiming to deal with these difficulties, Ba Sao issued numerous promotion programmes to lure in customers, including discounts of 5-10 per cent for customers using the Ba Sao payment card, or discounts of VND6,000-8,000 per route for brokers at hotels and restaurants.
Along with Ba Sao, other traditional taxi companies like Mai Linh and Vinasun also complain about Uber and Grab, reporting decreasing revenue and employee numbers.
Notably, Mai Linh Group released bleak business results in the first six months of this year. Accordingly, the number of Mai Linh employees decreased by approximately 6,000 to 24,000, falling 20 per cent on-year.
Besides, the company’s net revenue was VND1.72 trillion ($75.4 million), down 5 per cent on-year. Profit from other activities decreased to VND29 billion ($1.29 million), only half of what it was in the first half of last year.
Furthermore, as of the end of June 2017, the company bore an accumulated loss of VND800 billion ($35.1 million), equaling 80 per cent of its charter capital. In the first six months alone, its net loss from business operations was VND47.5 billion ($2.08 million), doubling on-year due to a sharp increase in sales and management expenditures.
Regarding Vinasun, in the second quarter of this year, the company’s net revenue reached VND810 billion ($35.7 million) only, a record low since 2014. Besides, quarterly after-tax profit fell by 50 per cent on-year, to VND16 billion ($706,299). The cumulative figure for the first six months was VND1.9 trillion ($706.29 million), signifying a decrease of 15 per cent.
Within the first six months of this year, the number of Vinasun employees decreased by approximately 8,000 to 9,179. According to a Vinasun representative, the company’s business results may remain gloomy until the end of this year.
VIR
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