Changes in its business model and operation helped taxi firm Vinasun avoid bankruptcy last year.

Illustrative image (Photo: VNA)

According to the firm’s chairman Dang Phuoc Thanh, they have also boosted performance in the first three months of this year.

2018 was a tough year for Vinasun (HoSE: VNS) and other Vietnamese taxi firms as their market shares were narrowed due to the strong growth of the ride-hailing company Grab.

Last year, Vinasun’s total revenue dropped 29 percent to 2.07 trillion VND (89 million USD) and its post-tax profit halved to 89 billion VND (3.85 million USD).

Thanh said at the firm’s recent annual shareholder meeting that since the appearance of Grab in Viet Nam in early 2014, the Singaporean ride-hailing business has grown strongly and taken over the passenger transportation market.

Meanwhile, the legal framework has remained underdeveloped and is not matching the growth of the market as well as customer demand, Thanh said.

“Operation conditions for taxi firms and ride-hailing businesses must be equal and regulations over the service must be strict enough to make sure passenger’s safety comes first,” he said.

In late December 2018, Vinasun won a court with Grab when the Vietnamese firm alleged Grab as the sole factor for its earnings decline.

Vinasun demanded Grab to compensate 41.2 billion VND (1.78 million USD). However, the court ordered Grab to pay only 4.8 billion VND (207,000 USD).

The court decision shows there’s still inequality in the way Vietnamese companies are treated against foreign firms, according to Thanh.

To improve its competitiveness in the transportation industry, Vinasun has developed its own booking application and learn new things to perform better.

Individual income for drivers is another important issue for local taxi firms. Thanh said the company wants to secure its driving staff so it allows drivers to franchise the cars and supports parts of financial expenses for drivers in advance.

In the first quarter of 2019, Vinasun recorded an annual increase of 7.2 percent revenue, which reached 534 billion VND (23.09 million USD). Of the figure, taxi drivers contributed 463 billion VND (20.02 million USD), up 12 percent year on year.

Its post-tax profit almost tripled to 32 billion VND (1.38 million USD) from 11.6 billion (500,000 USD) in the first quarter of 2018.

In 2019, Vinasun eyes 3.2 percent and 11.8 percent increases in total revenue and post-tax profit. The figures are projected at 2.14 trillion VND (92.5 million USD) and 99.6 billion VND, respectively (4.3 million USD).

(Source: VNS/VNA)