INTRODUCTION
Ride-hailing also is known as technology taxi in Vietnam – is the act of requesting a ride from a private passenger vehicle by an app on a smartphone This type of system is built, managed, and operated by ride-hailing companies (RHCs), Grab (Malaysia), Uber (United States of American), or Gojek (Indonesia) are some well-known RHCs in South East Asia countries area These RHCs serve as the broker between the customer who has ride demand and the driver who possesses and operates his/her own private vehicle After launch, Ride-hailing service (RHS) has immediately redefined the individual public transport industry (taxi or motorcycle-taxi in some South East Asia countries such as Vietnam, Indonesia, Thailand, and Cambodia) with its user-friendly platform, which includes extra convenience, variety payment method, completed door-to-door service, maximal reduced waiting time
RHS has appeared in Vietnam transport market in 2014 with 2 RHCs – Uber and Grab Until 4/2018, Uber sold the whole market share for Grab, stopped providing all services of Uber in Vietnam After Uber was taken over, Grab has occupied a large share of the passenger transport market Within 5 years, Grab almost has dominated the individual public transport market in Vietnam, it has supplied service to a majority of metropolitan regions spanning throughout 36 provinces/cities across the country with 175.000 partners (drivers), has become a important portion of urban transport and affect significantly to operation of other types of transport business, especially type of traditional taxi business as well as travel behavior of people According to Vietnam Parliament Television, by the end of 2017, in Hanoi and Ho Chi Minh City, the number of traditional taxi car is only 23.000, reduced 8000 vehicles compared with transportation planning, meanwhile number of Grab car, from 0 vehicles, increased up to 37000 vehicles The frequency of riding traditional taxi also goes down, 61% of users confirmed that they used traditional taxi service less frequently than a year ago (according to the survey of Asia Plus Inc in July 2017)
Figure 1 Traditional taxi usage change in last 12 month
(Source: Asia Plus Inc on July, 2017)
Currently, there is still no completed regulation for the operation of RHS in Vietnam Besides that, RHS also has been causing the big controversy among stakeholders regarding regulatory statutes imposed on its operation
The purpose of this study is to understand the history of introducing and the operation of RHS in Vietnam market as well as the reason of controversy based on the review of related websites, review of related laws, and statement of stakeholders about RHS Besides that, a group discussion is carried out with Grab’s user to evaluate qualitatively impacts of RHS on local people Finally, the research will evaluate the dynamic movements of ride-hailing vehicles relied on data of the ride- hailing app (RHA) on Information & Communication Technology (ICT) devices – the smartphone Based on the background, objectives presented before, the research question this study pursues to answer is: What is the current problem of ride-hailing service?
This thesis consists of 5 chapters This chapter focuses on the background, problems statement as well as the main objectives of this research The following chapters are written as follows:
Chapter 2 reviews previous researches in the literature to understand the research approach and how to find problems, thereby clarifying the research objectives in accordance with current studies
Chapter 3 summarize the history of introducing RHS system into Vietnam; analyze the legal mechanism relating RHS; find out operation of Grab in Vietnam transport market as well as reaction among stakeholders regarding its operation, thereby clarifying reasons of controversy around this type of service
Chapter 4 analyze the impacts of RHS on local people through group discussion; describe procedures to collect data by Grab app on the smartphone, thereby determining the dynamic movements mechanism of the ride-hailing vehicle
Chapter 5 concludes the discussion and identify current problems which may have on RHS, thereby proposing appropriate policies.
LITERATURE REVIEW
Grab company
The initial idea for Grabtaxi started when classmate group of Anthony Tan visited Malaysia and complained about their terrible experiences in a local taxi The complaint from friends stimulated thoughts in Tan, he started thinking about what is the problem of the taxi service in Malaysia and how to could improve it After came back Harvard, Tan and his team built a business plan for application on the smartphone that offers available taxis around the location of passengers by using mapping and location-sharing (Phillip, 2014) With the feasibility and potential contributions of the project for solving social problems, it received a runner-up award at the Harvard Business School’s 2011 Business Plan Contest
In 6/2012, Tan and his team returned to Malaysia, they drew up a business called MyTeksi - nowadays known as Grab company After launch, GrabTaxi has changed completely the image of taxi services, it expanded quickly and become the most convenient, fastest, and largest taxi booking service by app on the smartphone in the South East Asian countries area (Phillip, 2014) In 1/2016, GrabTaxi was rebranded as "Grab" which comprises all the company's products such as Grabbike, GrabCar, GrabExpress under one roof Until now, the company has appeared in 235 cities (Reuter, 2018) throughout eight countries, including the Philippines, Malaysia, Singapore, Thailand, Vietnam, Myanmar, Indonesia, and Cambodia (Grab, 2018), with secured financial funds of over 7.5 billion USD (Techcrunch,
2019) To date, there have been 139 million downloads, 46 million daily rides (Fortune, 2019), and 710.000 partners (drivers) on the Grab network (Grab, 2018), with an average of 7 bookings per second (TechinAsia, 2015) According to Tan, the use of smartphone is predicted to continue growing further in Asia, the demand for vehicle booking service by app on mobile definitely will continue to rise
Therefore, Grab set goals to increase its revenue and fleets, offer a safer and more efficient transport service to all and become a leader RHC in Asia.
Some key finding from studies about ride‐hailing service in South East Asia countries
In Manila, Philippines, rising mobility demand, coupled with declining the level of service of public transportation, has led to worsening congestion and commuting difficulties in urban centers Ride-hailing transport modes, which allow commuters to book trips through their smartphones, have become popular as an innovative strategy to address these issues (NAPALANG & REGIDOR, 2017) The rapidly growing RHS, on one hand, supply substantial trip services and complete the trips requiring no parking demand; on the other hand, imposes congestion effects on all commuters (Su & Wang, 2019) In Thailand, Grabtaxi has gradually moved into the phase of problem solving: the long-existent complaints of traditional taxi service are now being solved; the values of wellbeing and quality ride and drive are being upheld However, Grabtaxi operates through mobile-based technology without having to obtain a taxi operator’s license or owning a taxi, therfore it can be seen as a threat to traditional taxi operators (Ackaradejruangsri, 2015) Examining the influence of customer satisfaction on RHS in Malaysia, comfort is the most influence factor on customer satisfaction, beside that tangible, reliability, price, promotion and coupon redemption also have positive significant association with customer satisfaction (Balachandran & Hamzah, 2017) In case study in Phnom Penh, Campuchia, research results shown that after adopting ride-hailing apps (RHAs), the drivers could increase their revenue by increasing the number of trips and customers RHAs would be opportunities for those paratransit drivers who have adopted them, while they would be threats for those who have not (Phun et al.,
2018) Singapore government has identified five different types of technological risks: privacy, liability, automation, safety, and impact on current industries To cope with them, Singapore government adopted five different strategies: no response, prevention-, control-, toleration-, and adaptation-oriented Singapore has applied a pro-active approach to prepare itself to address the risks associated with RHS (Li & Taeihagh, 2018) Motorcycle taxi has become more popular in recent years since online ride-hailing companies launched motorcycle taxi services (Phuoc et al., 2019) The recent arrival of RHS might have altered the market for traditional paratransit services in Asian developing cities In particular, the current strength of motorcycle taxi is their provision of a good connectivity service, but if more RHS penetrate the market, motorcycle taxi operators will lose their market power – a case study in Bangkok (Phun et al., 2019).
Some key finding from studies about ride‐hailing service in developed countries
The competition between taxis and RHCs is economically healthy, because it breaks the monopoly of the taxi industry, forcing it to improve the quality of the supplied service (Silva et al., 2018) From passenger’s standpoint, perceived utility, compatibility, relative advantage and trust are antecedents of user satisfaction with RHA (Joia & Altieri, 2018) Ride-hailing may effectively reduce drunk-driving, and are convinced that as this mode increases in importance in the future, it will have a much more pronounced effect on the level of ridership of other modes as well (Young and Faber, 2018) RHS of Uber has the biggest complementary effects on the public transit systems that had the lowest ridership before Uber’s entry
However, Uber seems to be decreasing ridership on larger systems (Hall et al.,
2018) The ride-hailing induced trips that would not have been pursued if ride- hailing were not available such as trips for errand/leisure purposes Besides that, ride-hailing is generating more “drive alone” trips in the already-congested suburban and urban areas to serve individuals that already have the resources to undertake drive-alone trips, contrary to the main transportation and environmental goals of sustainable and equitable urban systems (Lavieri & Bhat, 2019) Very few older adults use RHS or expect to use them in the future, however, RHS may be a viable future option for older adults who have limited or stopped driving (Vivoda et al., 2018) Ride-hailing mode reduce fuel consumption and emissions sourced from empty cruising After dropping off previous passengers, ride-hailing drivers usually park their cars until being dispatched new orders and then drive directly to pick up passengers rather than search circuitously as traditional taxi drivers (Sui et al., 2019) One potential long-term effect of RHS may be observed on the household vehicle ownership level; households that would have otherwise owned two or three vehicles may now function as effectively with only one vehicle, and utilize companies like Uber and Lyft for all other types of trips This is a significant shift in travel behavior of RHS’s user (Contreras & Paz, 2017) In Sao Paulo, Brazil, 83% of current e-hailing trips derived from trips that were previously made by traditional motorized private modes Total economic activity expands by 1.089% if average vehicle occupancy reaches 3 passengers per trip and all motorized private trips are substituted by RHS (Haddad et al., 2019) RHS utilizes fleets of private cars and app technology, it operates between commercial and private services, they are partly outside the control of governments and, to some extent, contravene current regulations (Aarhaug & Olsen, 2018) Some major American cities have passed regulations that require RHCs to provide a list of drivers and share trip data with city officials By creating these requirements, city officials may be able to estimate how many ride-hailing trips are being made, and this can provide them with a better understanding of whether limiting the number of vehicles is an appropriate regulation (Beer et al., 2017).
METHODOLOGY
To identify the process of introducing RHS in Vietnam and to analyze the legal mechanism relating to RHS operation, the research has reviewed the webpages and documents of regulation relating to the transport business in Vietnam Some webpages visited including the official website of Grab (Grab.com), international magazines such as Tech in Asia, Vicent wee, or local newspapers online such as Bnews, Tiasang Documents of regulation are referred to including Decision 24/QD-BGTVT which was promulgated by ministry of transport (MOT) and Decree 86/2014/ND-CP which was promulgated by Prime minister Besides that, aim to identify reaction among stakeholders regarding the RHS operation, statement of stakeholders such as transportation expert, regulator, representative of traditional taxi company, representative of Grab, representative of transport association/company will be collected through social media Some social media channels visited including Parliamentary television, VOV national traffic channel, local newspapers online such as Labor, DTInews, Vnexpress, Cafebiz, Vietnam news agency and the magazine online such as Thanh Nien
The research will carry out a qualitative interview to gather insight about the impacts of RHS on local people Questions that relate to trip purpose, time to use, usage characteristics, trip pattern, the travel behavior and perspective about issues of RHS, has been given for respondents in the interview process
Finally, aim to determine and analyze the dynamic characteristic of RHS car, a survey is carried out based on Grab app Available data on the app which include the availability of ride-hailing vehicles, price of each trip, and the waiting time over a period of time in the day is collected Based on these data, the fluctuation of price over time and the relationship between the availability and the waiting time of RHS will be clarified.
INTRODUCING OF RHS, LEGAL MECHANISM AND CONTROVERSY IN OPERATION OF
The history of introducing RHS in Vietnam
In February 2014, Grab is a Singapore-based technology company that offers ride-hailing service through its app in Singapore and neighboring Southeast- Asian nations In June 2012, "My Teksi" app was launched in Malaysia market (known as "GrabTaxi" in other countries) In 2013, GrabTaxi expanded to the Philippines, Singapore, and Thailand In 2014, GrabTaxi further continued its growth and expansion to new countries: first launching in Vietnam in February, and in Indonesia in June
In the period from 2014 to 2016, at the initial time in Vietnam transport market, Grab reached out directly to taxi drivers by signing them up at airports, hawker centers, taxi queues, and depots The company also educated taxi drivers on using the smartphone and their mobile app In November 2014, GrabTaxi launched its first GrabBike service in Ho Chi Minh City as a trial service By 2015, GrabBike's motorcycle service rides had spread throughout Vietnam
In 1/2016, Ministry of Transport (MOT) promulgated Decision No.24, permitted GrabCar service to deploy in 5 cities, within 2 years, from 01/2016 to 01/2018 5 cities in the pilot program of MOT according to Decision No.24 including Hanoi, Ho Chi Minh City, Da Nang, Khanh Hoa, Quang Ninh GrabCar has become the most popular one of the travel modes in the urban transport system
In 1/2018, time for pilot activities of GrabCar service was expired Vietnam government and MOT are considering to build a new legal mechanism with new regulations for GrabCar’s activities In 4/2018, Uber sold whole their market share for Grab, withdrawn their activities from Vietnam
Figure 2 History of introducing RHS in Vietnam
Legal mechanism for operation of GrabCar service in Vietnam
In January 2016 the Ministry of Transport (MOT) promulgated decision No.24 which allow the implementation of technology application into the management and connection of activity of passenger transport under contract Decision No.24 allows GrabCar service to legally operate in 5 cities within 2 years from 2016 to 2018, it made a detailed pilot plan which aims to facilitate the application of science and technology to the transport industry as well as meet the practical demand of people such as time and transaction expenses reduction or the trend of using smartphone
According to decision No.24, there are 2 parties in this pilot plan including Grab company and transport companies/cooperatives The decision has clearly stated that only car drivers who are the member of transport companies/cooperatives are permitted to participate in the pilot activity, car must be under 9 seats (including car driver) with durable use is not over 08 years The transport companies/cooperatives will manage and control the operation of vehicle/driver; build the trip price calculation method and provide for Grab company Meanwhile, Grab company is responsible for installing connection application on smartphone of car driver; provide for the customer the trip price calculation method; time/place that the price of trip may be adjusted; and bill after completing the trip Base on regulations of
Decision No.24, the role of Grab in the pilot plan is only the connection application provider, and transport companies/cooperatives are the operators of GrabCar service Until now, the pilot plan is expired, policymakers, MOT and Vietnam government are building a new legal regulation that is more appropriate for the operation of GrabCar, however, they have met many difficulties due to the controversy around this new type of transport service.
Controversy among stakeholders regarding operation of GrabCar service
4.3.1 Lawsuit between traditional taxi and Grab
After GrabCar service has been approved for its activities in Vietnam, it caused big controversy between traditional taxi company and RHC The lawsuit between a representative of the traditional taxi - Vinasun and Grab company is the peak point of controversy The main purpose of Vinasun in this lawsuit is to influence and pressure Vietnam government, aim to identify RHA suppliers that are taxi companies
Table 1 Information of plaintiff and defendant in lawsuit
Taxi group was established and developed in Vietnam
Leading technology company in Southeast Asia region, a pioneer company in building the habit of moving by technology vehicle in Vietnam
According to Vinasun, Grab has not complied with prevailing regulations The Ministry of Transport’s Decision 24 on the pilot scheme for ride-hailing services indicated that Grab was permitted to operate as a ride-hailing service provider
However, Grab technically operates as a transport firm like traditional taxi firms
Vinasun claimed the “illegal” operations of Grab in Vietnam were to blame for a fall in its revenues by VND41.2 billion (US$1.75 million) from 1/1/2016 to 30/6/2017 As such, Vinasun has demanded that Grab pay VND41.2 billion compensate Vinasun’s losses
Vinasun allege that Grab took advantage of pilot activity to direct business, operate directly car driver, appoint who will pick up customer, decide fare, and adjust fare, collect money directly from customer, implement promotional programs, recruit directly car driver, make regulations to reward and punish car driver, connect with bank to help car driver could borrow 90% of car value, buy voluntary accident insurance for car driver and customer Vinasun claimed that Grab often offers promotional programs for customers and issues points to drivers to promote its transport service The ride-hailing firm’s activities, therefore, constitute a transport service by nature, not merely a technology service Grab also has exploited the lack of clear regulations for software-based transport services and offered “rampant” promotion deals and discounts, including “zero fee” trips, which was similar to the dumping of manufactured goods
Figure 3 Allegation of Vinasun about operation of Grab
Grab negated all allegation from Vinasun, Grab has not directly participated in transport activities and asserts that the company only assists in transport activity management for the transport company or transport cooperative For instance, in adjusting fare, the fare will be suggested by the transport company, all suggestions will be taken into Grab’system and the applicable fare is outputted by the Artificial intelligence (AI) algorithm Besides that, Grab gave Vinasun questions: For industry 4.0, What has Vinasun been doing? Vinasun applied science and technology for serving the customer or not? Has Vinasun ever considered discounting fare to bring more benefits for the customer? Has Vinasun ever organized a meeting to examine your service quality? Therefore, instead of blaming for impacts outside, Vinasun should look at oneself to could change and contribute many benefits for the customer, for industry 4.0
Remarkable events in the lawsuit:
03/05/2017 Vinasun filed a lawsuit against Grab and Uber
20/06/2017 The People's Court of Ho Chi Minh City confirmed the jurisdiction to settle the lawsuit
07/08/2107 Vinasun adjusted the petition, took Uber out of the lawsuit
10/08/2017 The People's Court of Ho Chi Minh City approved the adjustment of Vinasun's petition
15/11/2017 Vinasun adjusted the petition, increasing the amount of damage (41.2VND billion)
29/11/2017 The People's Court of Ho Chi Minh City approved the adjustment of Vinasun for the second time
06/02/2018 The People's Court of Ho Chi Minh City opened court of the first instance
04/05/2018 The Council asked stakeholder to suggest a list of damage inspection companies
10/05/2018 Grab submitted list of international damage inspection companies to the Council
30/05/2018 The Council appointed the Cuu Long Valuation Inspection Company to assess the damage (if any) of Vinasun
20/08/2019 Cuu Long completed and submitted a report to the Council
24/09/2018 The trial was delayed because Grab require that they need more time to study report
17/10/2018 The third trial was opened
29/10/2018 As expected, the verdict would be given and the trial would be finished However, the verdict has been adjourned until November 23 due to lack of concrete evidence and the appointed assessor, Cuu Long Valuation Inspection Company, was absent from the hearing sessions
23/11/2018 The trial was suspended within 1 weeks
30/11/2018 Vinasun and Grab suggested the Council suspend the trial
Vinasun and Grab want to reconcile with each other The Council approved the proposal of both
26/12/2018 Mediation process failed The trial was open again
28/12/2018 The verdict would be given The Council claimed that the operation of Grab is the taxi business, Grab violated Decree 86 and Decision No.24 of MOT, directly caused Vinasun’s losses However, Vinasun did not prove their damage is caused by only Grab Therefore, Grab must compensate 4.8 billion VND for Vinasun’s losses The Council also asked MOT to make an appropriate management mechanism for operation of Grab
4.3.2 Opinions of stakeholders relating operation of GrabCar service in Vietnam
There is various interaction among stakeholders regarding the operation of GrabCar service According to Spokesman of MOT at the beginning time of deploying Decision No.24: “Deployment of pilot activities of GrabCar service will enhance competition among passenger transport companies, also enhance competition among technology companies Company own management software which is more potential, the customer will choose This competition is appropriate with market rules”
Dr.Chu Cong Minh - Lecturer of BACHKHOA university said: “The current regulations are extremely inadequate For instance, Grab cars are not required to stick the logo at the side, do not have regulations for punishment So, management agency cannot control activities and amount of Grab cars The exploding of the number of Grab car break transportation planning of the city, prevent the development of public transportation vehicles”
“The ban on the activity of Grab will cause bad impacts on the economic aspect Not only Grab is damaged, but also car drivers will lose their main income
Many Grab drivers borrowed money to buy a car, but now, they cannot use it for transport business and get into debt Taxi association in other countries also protest activities of Uber, Grab because they claim that Uber, Grab has many advantages in the competition which lead the unequal competition However, activities of Uber, Grab is not banned, we should learn the way of management of these countries”, according to Mrs.Pham Chi Lan - Economic expert
“New technology-based business model may not be encouraged, and subject to technical barriers, but it does not mean that this new business model is eliminated Apply type of taxi business for Grab is a serious mistake”, Mr.Nguyen Dinh Cung - Director of the central institute for economic management said
“Grab get 29,5% of trip cost However, they are not responsible for the safety of passenger and insurance coverage of driver and vehicle They operate activities of drivers but according to Decision No.24, Grab is only connection service supplier, it is not a taxi business” Mr.Truong Dinh Quy - Deputy General Director of Vinasun company said
“If we identify Grab as a taxi company, we will negate efforts of government in the process of promoting digital economy in Vietnam, this is the backwardness of the process of building a startup country in the 4.0 technology era The advantages of sharing economy and the digital economy will completely disappear if we apply the type of taxi business for Grab The consequences will be extremely large”, Mr.Jerry Lim – CEO of Grab Vietnam said
According to Mr.Nguyen Van Thanh - Chairman of Vietnam Automobile Transportation Association, “Cannot manage Grab like traditional taxi It is necessary to build appropriate regulations for this new type of transport as well as remove the inadequacies in regulations of traditional taxi”
“In nature, the traditional taxi and GrabCar are the same However traditional taxi is under 13 regulations of the type of passenger transport business by Taxi, but GrabCar is not It can change the cost of trip, don’t need the permission of management agency GrabCar is under regulations that are very open Traditional taxi and GrabCar are same in nature and enter into a common transport market
Conclusion
The rapid development of Grab forces traditional taxi companies to have interactions to protect their own rights on the transport market The traditional taxi claim that the operation of Grab and taxi company are the same, however, business conditions of traditional taxi are more complicated than Grab so much So that, the competition between Grab and the traditional taxi on the transport market is unfair
Traditional taxi companies/associations have asked management agencies to control and manage Grab as a taxi company, ensure an equal business environment for all
Nonetheless, practically, Grab is only cooperating with partners including transport companies/cooperatives, in order to support car drivers to connect with customers more easily and conveniently The relationship of Grab and car drivers is relationship among partners, Grab does not own a vehicle or any driver Therefore, identifying Grab as a taxi company and applying regulations of taxi for Grab will lose the technological advantages of RHS as well as change the nature of enterprise
The launch of GrabCar service has impacts significantly on Vietnam transport market, especially the taxi industry Traditional taxi companies have changed their business strategy since the launch of GrabCar, they have offered a taxi service that has better quality for the customer, or some companies have launched a vehicle booking app on the smartphone which is similar to Grab's app As a result, customers have benefited the most from these positive changes The emergence of GrabCar service also has shown that, in the 4.0 technology era, besides building a new legal regulation for the operation of GrabCar service, current complicated business conditions of traditional taxi need to be removed to create a fairer and more competitive business environment for both GrabCar and traditional taxi.
THE IMPACT OF RHS ON LOCAL PEOPLE AND DYNAMIC MOVEMENTS OF RIDE‐
Survey description
5.1.1 Data collection by group discussion (qualitative interviews)
Aim to gather insight about the impacts of RHS on local people, a qualitative interviews was conducted with the support of Dr.Phan Le Binh and staff of Vietnam-Japan university (VJU) The qualitative interview was carried out on 24 May 2019 with the participation of 4 respondents (3 female and 1 male) who are the staff of VJU, in which, 3 respondents use Grab frequently for their trips, 1 respondent only uses Grab on some occasion; 2 people in middle age (43 years old) and 2 young people (28 years old) The interview was organized at VJU and took place within 1 hour under the witness of supervisor Dr.Phan Le Binh
Figure 4 Image of the interview at VJU
The content of the interview focuses on usage characteristic of RHS user and opinion of the respondent about problems which relate to the operation of RHS
Main questions are prepared before the interview take place The interview is a free- flowing conversation between the interviewer and respondents Respondents, besides answering questions, may share freely their thought, assessment, and perspective about relevant issues In the interview process, sub-questions may arise continuously by the reciprocal interaction between the interviewer and respondents
In order to avoid bias in the qualitative interview, keep the question simple and do not use questions that can lead the participant to respond in favor of a particular assumption For instance, instead of using the question: “Do you think that the price of Grab in bad weather or the peak-hour is very high?”, use another question: “How do you assess about price calculation mechanism of Grab in some special situations such as bad weather or the peak-hour?”
Main questions which are given in the interview are listed below:
What is your trip purpose when using Grab service?
Does everyone use Grab every day?
After Grab appears in Vietnam, do you still use traditional taxi or not?
Which time do you use Grab during the day? Which day of the week?
What are the important factors when you choose Grab?
How does your purchase demand change after Grab appeared in the market? Does it stimulate your purchase demand or not?
After using Grab, how does your travel expense change?
How do you assess about price calculation mechanism of Grab in some special situations such as bad weather or the peak-hour?
How do you think about the waiting time when using Grab in peak hours?
And you can accept how long is waiting time?
Does everyone use Grab as a paratransit mode?
Does Grab change your trip pattern or not?
5.1.2 Data collection by Grab app
The survey was conducted by collecting data of dynamic movements of ride- hailing vehicles on the specific journey (O-D) through the Grab app on the smartphone Data can gather from 1 vehicle booking times on the app including availability of ride-hailing vehicles, price of each trip, and the waiting time over period of time in day The survey aims to examine the fluctuation of price over time as well as the relationship between the availability and the waiting time, thereby clarifying why the surge pricing always happens in bad conditions such as the peak- hour or rainy day
Figure 5 The availability of ride-hailing car
Figure 6 The waiting time and the price of trip
The survey was conducted within 5 days of week including: Monday, Wednesday, Friday, Saturday, and Sunday Aim to ensure the result of examining the fluctuation of the price over time is the most accurate, the survey needs to be carried out within 24 hours in a day, with the frequency is 1 vehicle booking times on 5 minutes Data of temperature and precipitation of survey days also were collected, because the fluctuation of the price depends on the weather (base on the result of the qualitative interview) The detailed information of survey days are listed below:
Table 2 The detailed information of survey days
Day of week Survey day Temperature Precipitation
The available data on Grab app were collected in each specific zone Zone are suggested by geographical location and typical characteristic of each area Hoan Kiem district is representative of zone 1 Hoan Kiem is the urban core of Hanoi city, local people call Hoan Kiem region is the central business district (CBD) of the city because a large number of agencies, offices, commercial complex concentrated here Zone 2 includes 2 districts which are Dong Da and Thanh Xuan In these districts, the number of agencies and offices and the number of households are similar Bac Tu Liem district is a representative selection for zone 3 Bac Tu Liem is the suburb district of the city, it is a major residential area, there are not too many agencies, offices or commercial complex here
Table 3 The characteristic of zone
Zone District The characteristic of zone
1 Hoan Kiem Central business district
2 Dong Da + Thanh Xuan Agency/office + resident area
3 Bac Tu Liem Resident area
Figure 7 The location of districts in the city
The O-D pairs on each zone are fixed and set on the principle: Origin is in residential area and destination is in the agency/office area The detailed O-D pairs on each zone are listed below
Origin: 64 Nguyen Khiet Destination: Hanoi Tower
In order to avoid the bias of the survey result, do not apply the promotion or the cashless payment for all trips Using promotion or cashless payment make the real price of trip decrease from 30.000VND to 50.000VND, it leads to the wrong results of monitoring the fluctuation of price over time Besides that, because the survey take place continuously within 24 hours, it requires at least 2 people to take turns working on the cellphone (change the turn after 2 hours working on the cellphone), avoid loss of data by subjective factors.
Group discussion (qualitative interviews)
Me: What is your trip purpose when using Grab service? Go to work, leisure, business, meeting, send-off/pick up family member, delivery or shopping, so on?
Mrs.Nhu: I use Grab for all purpose you said, but my major purpose when using Grab is to go to work and book vehicle to send-off/ pick up my children
Me: When Grab has not appeared in Vietnam yet, how did you send-off/pick up your children?
Mrs.Nhu: At that time, my children still were young, I took my children to school or learning center by myself
Me: Have you ever picked up/sent off your children in the working time when Grab has not appeared in Vietnam?
Mrs.Nhu: No, I have never At that time, my children didn’t have many extracurricular classes as now Now, my child is a senior pupil, his travel demand is very high, he must travel to many places for his extracurricular classes within one day, and I cannot pick up/send-off him like before
Me: You allow your child to travel by himself when how old he was?
Mrs.Nhu: When he was at 8-9 grade (about 13-14 years old)
Mrs.Hien: In my point of view, Grab is the most intelligent and civilized technology-based transport service ever before The first time Grab launched Vietnam transport market, they have brought so many promotions to the customer, this activity encouraged customer using their service Grab appeared and solved the problem of my family: who must send-off and pick up the children? Who must leave office sooner to send-off and pick up them, me or my husband? One of the features of Grab I like the most is I can track the journey on my smartphone, I know where my child move to, who they accompany and name of driver, some parents even allow their daughter to use Grabcar at late hours (from 21h-22h) by its tracking function, I never dare to use traditional motorcycle-taxi (xe om) to send off/pick up my children before, this type of service make me not feel assured, I feel not comfortable because I don’t know how much the price is from A to B to bargain with driver When Grab has launched, besides using Grabcar, I also use Grabbike for picking up and sending-off my children by its advantages such as saving travel expenses, send-off/pick up door to door (*) In the half of the first year of using Grab, my travel expense by using Grab was very low, about 50.000VND/month (250Yen/month), Grab has offered promotions constantly such as give 5 trips with 30.000VND/trip, the price of trip from my home to office or shopping mall is about 27.000VND, and I didn’t have to pay any fee for my trip To summarize, my major purposes of using Grab are to send off /pick up children, sometimes go to work and delivery
(*) In some case, the car cannot approach door to door due to poor infrastructure condition in Hanoi
Mrs.Van: My major purpose is to go to work, delivery I also usually use another service of Grab - Grabfood
Me: How long everyone has used Grab?
Mrs.Hien: In the initial time, I mainly use Uber After that, I switched to Grab
I have used Grab for 3 years
Mrs.Van: I also have used Grab about 3 years
Me: Does everyone use Grab every day?
Mrs.Hien: Almost like that Mrs.Van: If I miss the bus, I will use Grab to go to work
Me: I realized that the main purpose of using Grab of everyone is the same
However, from the opinion of Mrs.Hien, I see one of reason make everyone like using Grab is Grab have much promotion, assume that Grab doesn’t give any promotions, does everyone still use this service or not?
Mrs.Hien: I still use because if I don’t use, no one sends off/picks up my children Recently, I don’t get any promotions of Grab, however, I still use it due to the necessary demand of my own and my children
Mrs.Nhu: With myself, I only use Grabcar service, don’t use Grabbike I have ever tried using Grabbike service once time, I realized this type of service isn’t professional, lack of safety, all people can become Grabbike driver with one motorcycle and one smartphone, I never use Grabbike for trips of my children
Me: In nature, Grabbike and traditional motorcycle-taxi (xe om) are the same, the basic difference is the technology application of Grabbike in connecting with the customer And another question, after Grab appears in Vietnam, do you still use traditional taxi or not?
Mrs.Hien: I nearly don’t use the traditional taxi, if I cannot book Grabcar, I will prioritize using my private vehicle or walking
Mrs.Nhu: I still use traditional taxi in some situations In the peak hour, when the price of Grab is so high, and taxis are available on the road, I will hail a taxi (the price of taxi don’t change over time) Or sometimes when the battery of smartphone is empty, certainly, I must take a taxi Or some urgent situation, I don’t have time to book a vehicle and wait, I will choose taxis which are available on the road
Traditional taxi is still very convenient in some case
Mrs.Van: I still use both, when I see the price of Grab is so high and I feel that
I can not accept, I will choose the traditional taxi The price of taxi is more expensive than the price of Grab with promotion but cheaper than in peak hour
Me: Which time do you use Grab during the day? Which day of the week?
Mrs.Hien: It depends on the learning schedule of children And I also often use Grab on weekend evenings for leisure purpose or visiting relatives
Me: What are the important factors when you choose Grab?
Mrs.Nhu: Firstly, I mustn’t wonder whether the driver has detoured? I know the price before booking, if I feel happy, and willing to pay for this price, I will book, the decision is mine Secondly, I know the information, name and appearance of the driver before getting on the car, it makes me feel more assured
Mrs.Hien: Grab has built one smart and modern app Firstly, it helps me track the journey of my children through the app Next, instruction on the app is very careful and exact, I can see clearly the name of lane, name of alley and places around my origin and destination on the app Thirdly, Grab app rarely be lagged and data display on the app such as waiting time, availability, the location of driver, the movement of vehicle are estimated very accurately Accuracy of these data has helped me so much in booking vehicle, for example, base on availability car data on app, if around my location, there are 8-10 available vehicles, I will book vehicle whenever I want, however, if there are only 1-2 vehicles, I have to book vehicle before about 5 minutes
Me: Does everyone care the about the payment method when using Grab to send off/pick up children?
Mrs.Hien and Mrs.Nhu: Of course!
Mrs.Nhu: With the cashless payment method, we only need recharging money into e-wallet to pay for the trip and our children also don’t need to bring too much cash in hand Problems which we concern before are no longer exist
Mrs.Hien: One more outstanding feature of Grab is that I can rate the service attitude of car driver after each trip, or send directly my feedback to the customer service department of Grab Drivers who are judged to have the poor service attitude will be punished by Grab, and the highest penalty is to stop providing the customer connection app of Grab for driver
Me: Before Grab has appeared in Vietnam, if you want to buy something, you must come to the store where it has goods you need, buy and bring it back
However, currently, Grab can help you do that, it will deliver goods which you buy to your place And my question is that How does your purchase demand change after Grab appeared in the market? Does it stimulate your purchase demand or not?
Mrs.Hien: The launch of Grab doesn’t impact on my purchase demand I use Grab for delivery purpose when I need sending something to my relatives, friends or partners
Mrs.Van: My purchase demand is higher than before, especially, after Grab has launched Grab food service My spouse often this type of service to buy snack foods and drinks every evening
Mrs.Nhu: Grab doesn’t impact on my purchase demand If I want to eat or drink something, I prefer going outside rather than order food and drinks to home
Me: After using Grab, how does your travel expense change?
Dynamic characteristic of RHS car
5.3.1 The fluctuation of the price over time
Based on the data of price which were collected before in each zone, diagrams which show the fluctuation of the price over time in each zone are exported below
Figure 8 The fluctuation of the price on weekdays in zone 1
Figure 9 The fluctuation of the price on Saturday in zone 1
The fluctuation of the prcice on weekdays
The fluctuation of the price on Saturday
Figure 10 The fluctuation of the price on Sunday in zone 1
Diagrams show that there is not the great fluctuation in the price on weekdays in zone 1 The fluctuation of price from 21h to 23h10 on Saturday and from 7h to 14h on Sunday are significant The independent-samples T test is used to verify the fluctuation of price in these periods of time
On Saturday, the period from 21h to 23h10 will be divided into 2 part including (21h-22h) and (22h-23h10) First part, the period from 21h to 22h will be compared with the period from 19h to 21h The second, the period from 22h to 23h10 will be compared with the period from 23h10 to 24h The result are shown below
Table 5 The fluctuation of price between 2 time group (21h-22h) and (6h-21h)
VAR00002 N Mean Std Deviation Std Error
The fluctuation of the price on Sunday
Levene's Test for Equality of Variances t-test for Equality of Means
Independent Samples Test t-test for Equality of Means
Confidence Interval of the Difference Lower
Base on the table is shown above, there is the significant fluctuation in the price at the period from 21h to 22h on Saturday (Std= 7.65) as well as the significant difference of mean between 2 time groups (Sig.= 0.009 3.01) However, the difference in mean between 2 time groups is not significant (Sig.= 0.287 >0.05)
Figure 11 The fluctuation of the price on Monday and Wednesday in zone 2
The fluctuation of the price on Monday and
Figure 12 The fluctuation of the price on Friday in zone 2
Figure 13 The fluctuation of the price on Saturday in zone 2
The fluctuation of the price on Friday
The fluctuation of price on Saturday
Figure 14 The fluctuation of the price on Sunday in zone 2
Diagrams show that there is a great fluctuation in the price at the morning peak-hour (6h-9h), the night off the peak-hour (19h-22h) on Saturday, and the evening peak-hour (15h30-19h) on Sunday in zone 2 The fluctuation of the price at the morning peak-hour happens all the day of the week (except Saturday)
Table 8 The fluctuation of price in zone 2
The period of time Day The average of price Standard deviation 6h-9h
There is a significant fluctuation in the price from 16h30 to 19h30 on Friday, and from 18h to 19h as well as from 22h to 22h30 on Saturday On Sunday, the great fluctuation of the price happens from 21h to 22h10
The fluctuation of the price on Sunday
The independent-samples T test is used to verify the fluctuation of price over time On Friday, the period from 16h30 to 19h30 will be compared with the period from 15h30 to 16h30 The result are shown below
Table 9 The fluctuation of price between 2 time group (16h30-19h30) and (15h30-
VAR00002 N Mean Std Deviation Std Error
Levene's Test for Equality of Variances t-test for Equality of Means
Independent Samples Test t-test for Equality of Means
Confidence Interval of the DifferenceLower
There is the significant fluctuation in the price at the period from 16h30 to 19h30 (Std= 6.20) on Friday, as well as the significant difference of mean between
On Saturday, the period from 18h to 19h will be compared with the period from 15h30 to 18h Next, the period from 22h to 22h30 will be compared with the period from 22h30 to 24h The result are shown below
Table 10 The fluctuation of price between 2 time group (18h-19h) and (15h30-
VAR00002 N Mean Std Deviation Std Error
Levene's Test for Equality of Variances t-test for Equality of Means
Independent Samples Test t-test for Equality of Means
Confidence Interval of the Difference Lower
There is the significant fluctuation in the price at the period from 18h to 19h (Std= 7.03) on Saturday, as well as the significant difference of mean between 2 time groups (Sig.= 0.029 0.5) When the availability is low, the waiting time will be longer, and vice versa
According to the opinion of respondents in the qualitative interview, the surge pricing always happens at the peak-hour Aim to find out the reason of this problem, based on the data of the waiting time in zone 2, the writer built a diagram of the frequency of the waiting time at the morning peak-hour in all the day of the week (except Saturday because the surge pricing does not happen at the morning peak- hour on Saturday) The result are shown below
Figure 20 The frequency of the waiting time at the peak-hour in zone 2
At the peak-hour, the wait time always be from 2 to 4 minutes When bad conditions happen, demand for using GrabCar is higher, maybe demand will be greater than supply, and waiting time become longer Therefore, a potential assumption is given that algorithm of Grab application will automaticaly raise prices to balance between demand and supply (when the surge pricing happens, the customer will not choose GrabCar service for their trip and the demand for using service will reduce significantly), ensure the waiting time not to be too long
DISCUSSION AND CONCLUSION
Ride-hailing service is a new travel mode in urban transport system in Vietnam However, it has spread rapidly and affect significantly to Vietnam transport market, especially the traditional taxi The appearance of RHS has redefined the taxi industry, Grab has transported tens of millions of passengers while the Government has not lost money to finance for development of this type of service, because it uses socialization source The relationship between Grab and the car driver is a partnership, it is not the relationship between boss and employee
Grab does not possess and manage any car The success of RHS in transport market has implied that RHS conforms to the trend of the consumer in the technology era, as well as, indicated that some current business conditions of the traditional taxi service have been too old, too complicated and need to be removed
Ride-hailing service also has impacted significantly on the travel habit of local people After the launch of Grab, it make accompanying trips of parents with their children are less than before, people usually use Grab for sending off/picking up their children due to its outstanding features such as tracking journey on the app, cashless payment method, knowing price in advance, knowing car driver information Some people have used Grab replace the private vehicle to go to work because they prefer to be driven by someone rather than driving by themselves and the cheap expense People also have used it as a paratransit vehicle to take them to the bus/BRT station From here, people will use bus, BRT to come to their destination In this case, RHS has encouraged people using the public transportation vehicle
The fluctuation of the price of Grab depends on the demand of the market
When the demand is high, the price of the trip will high and vice versa The great fluctuation of price frequently happens at the morning peak – hour (6h-9h) on weekdays when people have a high demand for going to work On the weekend, the price frequently fluctuates widely in the afternoon (16h30-19h), in the evening
(19h-22h) and at night (22h-23h) when people have a high demand for leisure purpose and going back their home The research has shown that the waiting time for a GrabCar does not only depend on the number of the available car around but also depends on the distance between the vehicle and the customer Finding for the reason of the surge pricing at the bad conditions such as the peak-hour, the research proved that, at the peak-hour, the waiting time always be very short (about 2-4 minutes) Therefore, a potential assumption is given that the algorithm of Grab app automatically raises prices to balance between demand and supply because when bad conditions happen, demand for using GrabCar is higher, maybe demand will be greater than supply, and waiting time become longer If the demand and the supply are balanced, the short waiting time always be ensured
From all findings of this research, Grab is supplying an extremely useful RHS to the customer, has efficiently addressed the inadequacies of the current urban transportation system Besides that, the launch of Grab in Vietnam has forced the traditional taxi to change their business strategy, offer a better quality service to customer Grab also contribute to encouraging people using the public transportation vehicle and decreasing demand for using the private vehicle The fluctuation of price over time or the surge pricing does not affect negatively to the transport market and local people because Grab is not an only RHS supplier in the Vietnam market Besides the traditional taxi, there are also other RHS suppliers such as Be, GoViet, Fast-Go, etc People have many other options for their trip if the surge pricing happens, Grab cannot manipulate the Vietnam transport market
However, there have been still no regulations for the operation of Grab or RHS in Vietnam, therefore building an appropriate legal mechanism for its operation is an urgent mission at now to manage and control efficiently this new type of service
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