Grab invests USD500m into Vietnam's e-economy
  • | | April 06, 2020 03:00 PM
Grab announced that it will invest USD500m into the e-economy in Vietnam as the Decree 10 has legalised app-based taxis which will enable app-based taxi firms to operate in more provinces and cities in Vietnam.


Grab to invest USD500m into Vietnam's e-economy

Decree 10/2020/NĐ-CP covering automobile transportation business was issued in January and came into force from the beginning of April. When the decree was issued, many people were worried that it would be the end for tech-based taxis since the firms were put into a pilot programme. The programme only allowed the firms to operate in some certain areas and for a period of time. Due to the uncertainties, investment was weak.

Bui Danh Lien, former president of Hanoi Transport Association said when the Decree 10 came into force, the market for tech-based taxis had been expanded.

"Instead of limiting operation in just five cities in the pilot programme, now individuals and organisations across Vietnam can invest and work for tech-based taxi firms and travellers can use app-based taxis everywhere," he said.

There will be no confusion about the app-based taxi and a traditional taxi. Firms must choose one model to work on and follow all requirements and regulations for that model.

Grab said after the Ministry of Transport issued guidelines about implementing the Decree 10, they would prepare to carry out everything as smoothly and quickly as possible. "Now Grab and other app-based taxis can officially operate on a national scale instead of in several cities in the pilot programme. Grab will not miss this chance to further develop and expand our service network," a representative of Grab said.

In the next five years, Grab confirmed that it will invest USD500m into Vietnam to contribute to the local e-economy development. The investment will bring the chances to improve incomes to millions of people and help improve the living condition in Vietnam.

Since entering Vietnam in 2014, Grab has become a leading app and top choice for travellers who want to commute quickly or for those who want to use food delivery service. The total transaction on Moca e-wallet on Grab had a 150% growth in the first half of 2019. The number of active monthly users has increased by 70%. Grab claims to have provided drivers with combined income of USD1bn.

When the Decree 10 went into effect and the market was expanded, Grab must take the chance to improve service quality, complete the car system as well as the brand recognition to meet rising demands.

The USD500m investment will be used for new services in Vietnam and to expand transport services, online food delivery and payment solutions networks. It will also be used to develop new mobile technology solutions, financial technology and logistics.

Grab has committed to help reduce poverty and set the goal to bring the benefits of the digital economy to provinces and cities nationwide. It also pledges to help millions of people in Vietnam improve incomes as Grab's drivers, delivery or business partners can all become mini-businesses on Grab app.

Another goal is to co-operate with financial organisations to provide financial services to mini and micro-businesses to help them access credit and insurance products for better development. It will help the unemployed, poor and near-poor people earn better incomes.

Moreover, Grab invests in a skilled workforce and IT talents in Vietnam so that they can help deal with challenges in Southeast Asia with AI or big data. Grab will also help improve public knowledge about digital finance.

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