Vietnam Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Vietnam Taxi Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Vietnam Taxi Market was valued at USD 0.44 billion in 2020, and it is expected to reach USD 0.79 billion in 2026, registering a CAGR of about 10.25% during the forecast period (2021 - 2026).

The COVID-19 pandemic hindered the growth of the Vietnamese taxi market as there were global factory shutdowns, travel bans, and border lockdowns, to combat and contain the outbreak, impacting every industry and economy worldwide. As tourism is a huge market, the demand for vehicle rentals halted with continuous lockdowns across the world pre-pandemic.

However, as the unlocking process began restoring economic activities, the Vietnamese taxi market is expected to witness nominal growth during the forecast period. People tend to prefer rental vehicles to any other means of transportation to maintain social distancing and hygiene protocols.

The reduced taxi fare and ease of booking through mobile applications are the major factors that drove the modern taxi service to capture a major share of the Vietnamese taxi market. Moreover, vehicle booking through phone calling and hailing on streets continue to exist as a major service among popular taxi firms, like Mai Linh, Vinasun, Vinataxi, TaxiGroup, Hoang Long, etc. Thus, traditional taxi service has a major share of the Vietnamese taxi market.

Among more than 200 taxi firms, Vinasun and Mai Linh are the major players in the Vietnamese taxi market. However, the entrance of Uber and Grab has affected the business of these players in the country.

Key Market TrendsMotorcycle Ride-hailing Services Anticipated to Dominate the Market

Motorcycles/bikes, for more than two decades, are the most widely used mode of transportation by the Vietnamese people. As of 2019, out of the 96 million population in Vietnam, nearly 49 million owned motorbikes. Over the past three years, the country has registered nearly 3 million motorbike sales each year, owing to the growing affordability caused by the improvement of their average monthly income.

The growing motorbike sales in Vietnam and its penetration into the ride-hailing and taxi industries have enabled motorcycles as the best compatible model of transport (at least for shorter distances), owing to their availability at half the fare of a taxi/ride-hailing car. The entry of app-based motorbike taxi services had predominantly captured the market share of the traditional motorbike taxi, popularly known as “xe om” in the country.

In the Vietnamese motorcycle taxi market, traditional taxi drivers are still present, especially in tourist areas. However, the app-based motorbike services dominate with more than 60% share in the country’s motorbike taxi market. The increasing entry of both local and international companies into the app-based motorbike services, with unique promotional programs in the Vietnamese taxi market, is likely to further propel the demand for the app-based motorcycle ride-hailing market during the forecast period.

Ho Chi Minh to Lead the Taxi Market in the Country

The demand for taxis in the country is growing from every corner. However, Ho Chi Minh City is leading the Vietnamese taxi market, followed by Hanoi and other cities.

Ho Chi Minh has experienced taxi vehicles' surge in the city roads under the ride-hailing pilot program. The overall taxicab number is anticipated to exceed the limit, i.e., ~14,500 by 2020 and ~16,500 by 2025, as stated under the city's taxi management plan. For instance,

With the introduction of the new Decree, nearly 77 taxi firms in Hanoi have a potential scope to build and launch their own ride-hailing app in the coming years. Among these taxi firms, Mai Linh and TaxiGroup have popularly used taxi services in Hanoi city, providing online booking options through their apps.

The app-based companies, such as Uber and Grab, got support from the public, as people said they were unhappy with inadequate and unreliable services provided by traditional taxi firms, such as drivers refusing to serve short distances or failing to show up regardless of clients' booking.

Competitive Landscape

The Vietnamese taxi market is fragmented. Industry participants are likely to witness intense competition, owing to aggressive strategies, including acquisitions, pricing, merges, and new product developments. Major players in this market include Mai Linh Group JSC, Vinasun Corp, VinaTaxi, and GrabTaxi Holdings PTE Ltd. For instance,

• Vinasun Corp. dominated the taxi market, followed by Grab and Mai Linh Group. Both Vinasun Corp. and Mai Linh witnessed a consistent decline in revenue. However, Vinasun Corp. is still accounting for a major share in the market, owing to its presence for more than a decade in the taxi industry.
• Recently, after Uber withdrew from the country, the domestic ride-hailing market witnessed intense competition, with new brands, such as FastGo and Go-Jek entering the market, along with the renovation of old brands, such as Vinasun and Mai Linh.

Companies like Vinasun Corporation, Mai Linh Group, and Grab, and new brands, like Go-Jek, FastGo, and Aber are operating in this highly competitive market.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Grab Taxi Holdings Pte Ltd
Kyyti Group
FastGo
Go
Jek
MVL Chain
Mai Linh Group JSC
Vina Taxi
Viansun Corporation
Hoang Long
Vota
Taxi Navi

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