group assignment macroeconomics

Grab first appeared in Vietnam in 2014and brought a phenomenon of motorbike taxi technology leading to a series of otherapplications such as Gojek, Loship, Baemin, and so on.This report

FPT UNIVERSITY- CAMPUS HO CHI MINH

GROUP ASSIGNMENT Macroeconomics

1 Nguyễn Thị Thùy Dung SS160303

1002 Nguyễn Công Minh SS16037

1003 Nguyễn Ngọc Mạnh Khương SS16039

1004 Trần Thị Thùy Dương SS16039

1005 Hoàng Thị Mỹ Hoa SS16039

100

6 Hà Nguyễn Thu Nga SS160428

100

Figure 1.2 Vietnam: Unemployment Rate of Labour force at Working age, 2021……… 6

YFigure 2.1 Grab leads the “Money-burning” race in the first half of 2019……….8

Figure 2.2 Market share of ride-hailing applications in Vietnam in the first half of 2020…… 10

YFigure 3.1 Deduction rate calculated on vehicle sales (SDUD fee 20%)………

11Figure 3.2 Deduction rate calculated on vehicle sales (SDUD fee 25%)……… 12

A Abstract

Grab (formerly known as GrabTaxi) is a Singapore-based technology companyProviding motorbike and car transportation and transportation services in Singaporeand other Southeast Asian countries such as Malaysia, Indonesia, Philippines,Vietnam, Thailand, Myanmar and Cambodia Grab first appeared in Vietnam in 2014and brought a phenomenon of motorbike taxi technology leading to a series of otherapplications such as Gojek, Loship, Baemin, and so on.

This report examined Grab's business model and analyzed the impact of grab on Vietnam Based on published articles, the results showed that Grab had a strong position in the transportation market and bring many benefits to the Vietnamese market While more research is needed for further analysis, the findings suggest that Grab's business still appears to have some risks for Vietnam's indices regarding unemployment rate or productivity and so on From our analysis of Grab, we have drawn many conclusions and advice for the government in this era.

B Content

I.Unemployment Rate

In 2019, Grab invested an additional 500 million USD in Vietnam to exploitopportunities in new areas in Vietnam such as transportation, food delivery andpayment This proves that Grab needs a strong workforce to fulfill its desires.Therefore, hiring more Grab drivers was the minimum necessity of Grab at that time.As a result, in the most recent sharing in 2019, Grab said that there are 195,000 driverpartners in Vietnam, including 2 wheels and 4 wheels (Vien Thong, 2021) Thanks tothat, until August 2019, Grab has helped hundreds of thousands of driver partnersimprove their livelihoods (Grab, 2019)

Moreover, in 2020, Grab announced a 'Tech For Good' development roadmap that willhelp lift local communities out of poverty, build a highly skilled Vietnameseworkforce and create a better future environmental sustainability (Grab, 2019) Two ofthe three main items in the "Tech for good" campaign that Grab does for Vietnam are:

1 Lifting communities from poverty: Grab will expand to 63 provinces in Vietnamand create employment opportunities for millions of Vietnamese people to earn aliving including delivery partners, sponsorship partners or trading partners [This isintended to improve the quality of life for unemployed, poor and near-poorhouseholds, especially in rural provinces, while enhancing their access to minimumwage income and enterprises earn more from business This activity will be the

Contribution section in the international item if the keep rate failed to market in low less than 4%] (Grab, 2019).

-Figure 1.1 Vietnam: Unemployment rate from 1999 to 2020.

Source: Published by Aaron O'Neill, Feb 8, 2022, Statista.

2 Building tomorrow’s skilled workforce today: Grab launches its flagship “GrabVentures program”, in line with the government's national strategy to create 10technology unicorns by 2030 (Grab, 2019) This shows that, as more subsidiaries areopened, providing more job opportunities for more people The number ofunemployed people decreases thanks to this.

The presence of Grab has brought significant benefits to people in solving the problemof unemployment After more than a year of COVID-19, people seem to return towork as usual However, due to the impact of COVID-19, the number of businesses

withdrawing from the Vietnamese market in the first months of 2021 increased by36%, up to 25,750 enterprises (Phuong Dong, 2021), which leads to a higherunemployment rate in Vietnam In the South, although there are new businessesentering the market, they still cannot provide a large number of job opportunities formany people in a short time.

Figure 1.2 Vietnam: Unemployment Rate of Labour force at Working age, 2021.

Source: The data is obtained from GSO.

Therefore, there is a trend of unemployed workers to temporarily work for technologyservice enterprises, especially Grab Grab driver is a job that does not require higheducation or previous work experience, so Grab's presence has supported unemployedpeople to get a job Although Grab no longer has a policy to publish the number ofactive driver partners in 2022 However, as I mentioned above, the most recent

number they have announced in 2019 is about 195,000 partner drivers Now, morethan 4 years have passed, and we can see that the number of Grab drivers has risen"terribly".

II.Productivity and Growth

Empowering Micro and Small Businesses: Microenterprises are at the heart of Grab'sbusiness model, while small businesses are seen as the lifeblood of Southeast Asia'seconomy To help these people save costs and improve productivity through theapplication of technology, Grab aims to help 5 million more brick-and-mortarbusinesses and small shops digitize their workflow (Grab, 2019) When Grab investsthe companies will have the capital to buy machines and equipment for production.Therefore, companies can produce a large number of goods and services It leads toproductivity growing rapidly, and so do Vietnam's living standards because a countrycan only enjoy a high standard of living if it can produce large quantities of goods andservices (Mankiw, 2021).

Grab Holdings Inc invest 500 million USD in Vietnam over the next 5 years todevelop financial technology solutions, new mobile technology, and logistics with thegoal of continuing to make positive contributions to the development of the digitaleconomy develop of Vietnam and create millions of opportunities to increase incomeand contribute to improving the quality of life for Vietnamese people (Grab, 2019 ).From that, The average worker has more human capital knowledge and skills workers

acquire through education, training, and experience about technology and easy tocreate goods and services make productivity increase H/L causes an increase in Y/L.

Figure 2.1 Grab leads the “Money-burning” race in the first half of 2019.

Source: Each ride, Grab, GoViet, Be is "burning" 1-2.5 USD?, October 11, 2019.So far, Grab has helped improve the lives of hundreds of thousands of driver partnerswith a total cumulative income of nearly 1 billion USD, while supporting millions ofpeople to access cashless payment methods through a strategic partnership with Moca(Grab, 2019) It improves society’s understanding of the best ways to produce goodsand services Creating common knowledge: after one person uses it, everyonebecomes aware of it and creates a new technology environment for more people.

Grab will also encourage tech entrepreneurship and support the growth of Vietnam'stech startup ecosystem through its Grab Ventures program This is also in line with theGovernment's Strategy to Create 10 Tech Unicorns by 2030 In addition, Grab willalso contribute to improving people's understanding of finance and digital, thereby

contributing a part to the national goal of having 65-70% of the populationknowledgeable about these two areas (Grab, 2019) It can be said that Grab is not onlya technology motorbike taxi application, but it also gives Vietnamese people newknowledge, a new environment that increases the living capital and living standard ofthe people.

Bringing the breath of the times and making the most of the superiority of thetechnology platform, Grab is considered a remarkable representative of the sharingeconomy with a declaration of the digital economic revolution, maximizing thesymbiosis when opening up opportunities to earn additional income for more than175,000 driver partners, helping to increase the efficiency of traffic servicemanagement for hundreds of cooperatives and transport partners (“What contributiondoes Grab make to the transport market and the sharing economy?”, 2022) On theother hand, Grab drivers have an average monthly income that is more than double thenational average monthly income Sales partners also saw an average revenue of threetimes more than before partnering with GrabFood as we assist them in marketing andreaching a broad customer base.

Figure 2.2 Market share of ride-hailing applications in Vietnam in the first half of 2020.

Source: ABI Research

Being a pioneering company like Grab and having access to advanced technologyplatforms in the 4.0 age that accept significant investment is a major incentive todevelop, adapt, and keep up with the times turn the globe Since the transportationsector is also a service business, applying the 4.0 trend to alter travel patterns and raisethe standard of transportation has become popular.

III Advice

On the government's side, the reduction of VAT applied to production and businessorganizations and individuals has helped Grab partly reduce economic difficulties andat the same time create momentum to recover from the impact of the COVID-19pandemic Specifically,the Government's Decree 15/2022/ND-CP issued on January

28, 2022 detailing the tax exemption and reduction policies according to Resolution43/2022/QH15 of the National Assembly , whereby the value-added tax (VAT) rate forpassenger transport business services will be reduced by 2% (Grab, 2022) Thegovernment should take the above support measures in the current and futureepidemic situation Moreover, it is necessary to have specific plans to deal with badcases that severely affect the economy as well as increase the unemployment rate forthe country.

Figure 3.1 Deduction rate calculated on vehicle sales (SDUD fee 20%).

Source: GrabCar: Tax policy changes, Tuesday February 15th, 2022.

Figure 3.2 Deduction rate calculated on vehicle sales (SDUD fee 25%).

Source: GrabCar: Tax policy changes, Tuesday February 15th, 2022.

The success of Grab, with its creative business strategy combining several schools ofthought, is a fantastic example of how companies are changing in the digital age To

compete in the current market, Vietnamese enterprises must alter their businessstrategies to capitalize on their organizations' strengths and adjust to shifting marketconditions (PhoHen, n.d.).

Executives must first identify the organization's key competencies before makingadjustments to products or services to create value for customers By expanding onthat underlying resource, businesses may expand their business models and createmore diverse revenue sources (PhoHen, n.d.).

In order to create new products and services that provide value, businesses look intoand grasp the problems that their customers are experiencing They also supportinnovation at all organizational levels It might be an innovative product or service, orit could optimize the pricing to be more affordable for customers than competitors(PhoHen, n.d.).

Generally speaking, enterprises may extract their own development plans from Grab'screative business model, which has been effective in Vietnam Leaders cansuccessfully combine exploratory and exploitative thinking to develop and enhancetheir business strategy Reality has shown that this combination is successful in theVietnamese market Executives must be aware of the organization's resources and keycompetencies They must also undertake market research to pinpoint client painpoints Gaining regular training is essential to having strong human resourcescoherence and understanding (PhoHen, n.d.).

Grab officially entered the Vietnamese market in 2014, but after only a few shortyears, Grab has made great contributions to the development of Vietnam's economy.The first is not to mention that Grab has supported jobs for more than thousands ofVietnamese people Since having Grab, people have more job opportunities withouthaving a high education to be able to work This helps people have more income forthemselves and their families It's direct support from Grab In addition, Grab alsoinvests in various small companies so that companies can grow, thereby creating workopportunities for others This helps the unemployment rate in Vietnam to be lowerthan before.

In addition, it is impossible not to mention that Grab's contribution has impactedproductivity It is the investment in unicorn companies so that they can buy machineryand equipment, increase wages, and improve knowledge that has increased theproductivity of employees in general and the Vietnamese economy in particular Alongwith increased efficiency, economic development also increases.

In conclusion, the presence of Grab has contributed significantly to the developmentof Vietnam's overall economy from reducing unemployment, increasing productivityand growth Vietnam.

C Reference

Grab to invest US$500 million more into Vietnam to spur development of digital economy grab (2019, August 28) grab Retrieved July 26, 2022, from

https://www.grab.com/vn/en/press/business/grab-se-dau-tu-them-500-trieu-usd-vao-Grab Team (2022, February 15) https://www.grab.com/vn/en/press/business/grab-se-dau-tu-them-500-trieu-usd-vao-GrabCar | Value-added tax policy changes according to Decree 15/2022/ND-CP from February 15, 2022 grab Retrieved July 26, 2022, from

https://www.grab.com/vn/en/blog/driver/nd15-2022-nd-cp-grabcar-15-02-2022/Grab's Breakthrough Business Model in Vietnam (n.d.) phohen Retrieved July 26, 2022, from https://phohen.com/post-detail/mo-hinh-kinh-doanh-dot-pha-cua-grab-tai-viet-nam/1068850611

Grab aims to realize the mission of Technology for the Community in Southeast Asia according to the roadmap to 2025 (2019, September 24) grab Retrieved July 27, 2022, from https://www.grab.com/vn/press/business/grab-dat-muc-tieu-thuc-hien-su-menh-cong-nghe-vi-cong-dong-o-dong-nam-a-theo-lo-trinh-den-nam-2025/General Statistics Office of Vietnam (2021, April 20) Infographic labour and employment in the first quarter of 2021 gso.gov.vn Retrieved July 25, 2022, fromhttps://www.gso.gov.vn/en/data-and-statistics/2021/04/infographic-labour-and-employment-in-the-first-quarter-of-2021/

General Statistics Office of Vietnam (2021, July 14) Infographic labour force and employment in second quarter and 6 months of 2021 gso.gov.vn Retrieved July 25, 2022, from https://www.gso.gov.vn/en/data-and-statistics/2021/07/infographic-labour-force-and-employment-in-second-quarter-and-6-months-of-2021/

General Statistics Office of Vietnam (2021, October 13) Infographic labour and employment in quarter III and 9 months of 2021 gso.gov.vn Retrieved July 25, 2022, from https://www.gso.gov.vn/en/data-and-statistics/2021/10/infographic-labour-and-employment-in-quarter-iii-and-9-months-of-2021/