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Vinasun cuts 2017 business targets

Released at: 08:13, 22/07/2017

Vinasun cuts 2017 business targets

Source: Internet

Taxi company struggling with competition from Uber and Grab.

by Ngoc Chi

Vinasun Corp., the owner of Vinasun Taxi, has released its financial report for the second quarter 2017, with most business indicators falling compared to the same period last year. Net sales in the quarter reached VND810 billion ($35.6 million), down 27.8 per cent year-on-year, while revenue was VND1.9 trillion ($83.6 million), down 15.6 per cent.

In its net revenue structure, passenger transport services accounted for 92 per cent. Financial income also fell sharply, from VND4.5 trillion ($198 million) to VND1.6 trillion ($70.4 million).

After-tax profit in the second quarter was VND46 billion ($2.02 million), a 50 per cent decline year-on-year, and VND101 billion ($4.4 million) in the first half, down 32 per cent.

Employee numbers have fallen significantly since the end of last year, from 17,160 to 9,179.

Earlier, in a letter to the Prime Minister in mid-May, Vinasun said 4,239 employees quit in the first quarter and 300 vehicles were taken of the road because of intense competition from Uber and Grab.

The arrival of the bus rapid transit (BRT) system and the upcoming completion of urban railway lines are expected to significantly affect Vinasun's future business, with revenue and profit targets reviewed for this year.

It targets annual revenue of VND4.25 trillion ($187 million), down 10.6 per cent compared to 2016 and pre-tax profit of VND256 billion ($11.2 million), down 35.5 per cent.

The battle between Grab, Uber and traditional taxis is increasingly fierce. Vinasun, the leading taxi company in Ho Chi Minh City in terms of market share, has proposed a series of measures to make Uber and Grab comply with existing law and ensure fair competition.

Uber and Grab, it said, have used application software to connect drivers and customers without gaining permission from authorities. While Vinasun has to pay taxes and abide by 13 business conditions, Grab and Uber do not.

Vinasun, therefore, recommended that Grab and Uber be classified as “taxi companies”.

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