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To Compete With Grab, Hanoi Taxi Companies Merge to Form G7

A new development has emerged in the battle between traditional taxi fleets and new, app-based companies, as three taxi companies have merged together to form the capital's largest taxi business.

Many Hanoians are increasingly hesitant to hail taxis directly from the street when app-based companies like Grab offer much lower rates. Now, a new coalition of taxis is offering a lower fare structure to compete, VnExpress reports.

Made up of formerly independent taxi companies, G7 aims to be competitive in the marketplace by introducing fixed fares for short-distance rides. The fare for the first kilometer will be VND9,900. Grab, on the other hand, charges VND20,000 for the first two kilometers.

The new G7 taxi union is now the largest of its kind in Hanoi and was founded in October by three taxi companies: Than Cong, Ba Sao and Sao. Together they have roughly 3,000 cars and account for 20% of taxis in the capital.

"Traditional taxis, each with their own app, are now trying to compete with Grab. But we are divided, therefore we need to unite,” Nguyen Cong Hung, the Chairman of the Hanoi Taxi Association, said earlier this year, according to the news source.

A similar taxi merger took place in Saigon earlier this year when ComfortDelgro Savico joined Vintaxi. The new company estimated that merger would increase its growth six-fold this year alone. 

Taxi companies have struggled to stay in business since the arrival of Grab and other ride-hailing services in Hanoi. In recent years, the three companies behind G7 say they witnessed an average loss of 10-15% in annual revenue. In 2010, 115 taxi companies were operating in the city. Now, only 70 remain, VnExpress shares.

Since Grab's arrival in Vietnam four years ago, other ride-hailing apps such as Go-Viet have gained popularity. To retain their competitive edge, Grab has announced plans to bring over 100 rest stops to Saigon and Hanoi that will offer free WiFi, coffee and vehicle washing services for their drivers.

[Photo via VnExpress]

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