Taxi - Don't let technology increase fares

DNHN - The domestic taxi market is witnessing a major crisis. Technological taxis, after a period of storming, now also show many limitations. The market record shows that technology car companies often have higher fares than traditional taxis. So what is the solution to save the taxi businesses today?

According to the Hanoi Transport Association, for technology vehicles, Grab alone has sometimes reached 100,000 vehicles. Hanoi at its peak had up to 60,000 technology taxis. However, currently, the number of Grab and Bee's partner cars is about 16,000 and traditional taxis are about 10,000.

After 2 years of the COVID-19 pandemic, there were about 40,000 cars in Hanoi belonging to individuals and organizations that borrowed from banks for investment and were forced to sell cars to cut losses. Mr Nguyen Cong Hung, Chairman of the Hanoi Taxi Association (HNXHN) said: "According to the statistics of the Hanoi Transport Association (HHVTHN), the number is even more tragic, only about 9,000 vehicles."

Many challenges were thrown at the driver.

Even while the price of fuel has reduced, it only accounts for a portion of the price; many other products are still rising, making investments in vehicles and taxis no longer guaranteed to "break even." 80% of Hanoi's drivers come from the provinces, and many have been compelled to leave and return to their homeland, resulting in a lack of driving.

The HHVTHN official stated: "For example, at airports, like Noi Bai Airport, the number of travellers in and out is extremely great, but today there are many personal vehicles, more and more automobiles outside, Noi Bai Taxi Cooperative had 300 cars but now only 30 cars remain."

Mr Duong Manh H, 45, is a licensed driver in Hanoi's inner city who has been a taxi driver for over 15 years and has worked for a variety of cab firms, both conventional and technology. Mr H. still runs a taxi but does not own a business and does not work in "technology." Someone hired his automobile, which he parked near a hospital every day. He was forced to become an "umbrella" car because, in recent years, partly due to the epidemic of lack of customers, and then the price of fuel increased... and a point that he thought was as difficult as the problems mentioned above were the problems of the amount payable to the "brand" is too much.

These are the so-called management fees in traditional cab firms, and money talks... If you operate a technology vehicle, you must still pay fees to the owner business or cooperative..., as you must still join the cooperative that has previously signed a contract with a car technology firm. Earning 1 dong of sales, roughly one-third of which are technology businesses that earn extra overnight fees and platform fees... Of course, riders pay for everything. However, the greater the price, the fewer clients there are. In fact, instead of employing technological taxis, many clients have switched to traditional taxis.

Fares for technology taxis are higher than for regular taxis.

Technology taxis used to make waves, providing new values for taxi operations, but in fact, the fares of technology taxi businesses are greater than those of regular taxis.

"Until June 2022, at the peak, gasoline climbed to VND 34,000 per litre, a rise of roughly 61% compared to 2019," said Mr Nguyen Cong Hung, Chairman of the Hanoi Cooperative Society. While traditional taxis make it tough to change the fare, businesses such as Grab make it relatively simple. According to Mr Hung, when the price of gasoline rises, so will the fee.

Grab also charges a hot weather tax, which the Hanoi Social Union considers to be unlawful. Because, in general, the freight rates have been increased within the modified threshold of 5,000 - 10,000 VND/km, all labour, administrative, and asset depreciation expenses are included in the price rise, and no further fees are permitted. This result of the post-inspection pilot work allows them to unilaterally "raise pricing" (the hot weather fee is 5,000 VND and the foundation maintenance fee is 2,000). State management authorities must make this clear."

EMDDI of EMDDI Joint Stock Company is one of the software that has been implemented under the investment of Vietnamese firms and has not been particularly effective. EMDDI is designed for around 15 participating taxi units, from which taxi clients can request automobiles using the EMDDI app.

However, if these 15 units use the same Emdi app, the app's pricing may conflict with the fee of the taxi firms that are loaded on the meter, which may be cheaper or higher. Essentially, it just fulfils the demands of hiring a car, similar to the apps of Mai Linh, G7, Van Xuan, and others; every business has an app. Of course, the fare when booked through the Emdi system is more than that of a typical cab, as the Hanoi Cooperative Society spokesperson pointed out.

Not only that, but a lot of traditional taxi companies have also made their tech systems so that customers can talk to drivers. But none of the systems has lived up to what was hoped for. The reason is that taxi services are only available in a certain area. When people move, sometimes to a different province and sometimes to the same one, they have to use multiple systems and apps at the same time if they want to call a car. This is very annoying and makes people not care, plus they can't use all their apps to compare prices and find the best deals.

Freight charges are a problem that needs to be solved before the technology can be used.

According to Mr Do Khac Ha, who is the director of Viladata Company, a business that develops technology for the transportation industry, he said: "The company has been working on and now has a taxi and air freight connection system. This system can solve problems that already exist and handle the use of technology without making freight rates go up."

The company's solution is Tadi API. Tadi offers an API that GPS companies can use to integrate data about a vehicle's coordinates, temperature, speed, and whether or not it is on. Tadi doesn't change prices, and all taxi companies and cars can use it as much as they want. Bidding is the key to how this system works. Passengers will post their travel plans in the form of a "contract," and taxi drivers who can provide the service will act as "contractors."

With this form, riders can choose a car, a driver, a price, and check the reputation of each driver, among other things. The system also lets the driver set a basic price or a price for each trip. The cost of each trip is set by the driver and the person riding with them. The best way to save money is to avoid driving back without customers. This will make driving about 40% more efficient.

Tadi simply provides technological solutions in the form of exchange; drivers may register to utilize it regardless of whether they are in any business; they can even be business persons. Passengers simply need to use one app to access all drivers from all taxi firms, select a car, select a fare, select the best driver, and depart.

"Application of technology is unavoidable; firms that do not innovate would undoubtedly not be able to thrive. However, if the application of technology raises fares or puts pressure on drivers to make it more difficult, it is apparent that such technology must be created" Mr Do Khac Ha stated.

Hanh Nguyen