Traveling in uber style

Most people in Vietnam never thought it would happen, but it has – the Uber app has arrived. The luxury transportation startup that connects users with a driver at the tap of a smartphone screen debuted in Bangkok in February, Beijing in April, and Jakarta in June. This month it reached Ho Chi Minh City and is on track to roll out in major cities across Asia. Uber’s presence here is interesting because the city is already dominated by two major taxi companies: Mai Linh and Vinasun. In the past 10 years, the two companies have flooded the city with their recognizable green taxis and logos and reliable services, beating out their smaller competitors. Uber will face resistance from these two incumbents whose drivers are increasingly using two of Uber’s competitors: GrabTaxi and EasyTaxi apps. Although the numbers cannot be verified definitively, some in the startup ecosystem believe that Grabtaxi is doing better than EasyTaxi because it is offering a better discount and marketing strategy across Vietnam’s two major cities – Hanoi and Ho Chi Minh City.

Either way both will now have to contend with Uber’s unique marketing techniques. As Uber’s press release outlines, it playfully partnered with Vietnamese celebrities for the extra boost on the day of the launch: actresses Hong Anh and Chi Pu, singer Hoang Thuy Linh, and blogger Nicky Khanh Ngoc were the first to jump at the chance to try Uber out for a ride on the town. They downloaded the Uber app, and within 10 minutes, a luxurious Uber was able to whisk them away to a movie set, a recording studio, and a photo shoot. We’ll let you figure out who went where.

We’re likely to see more of these marketing ploys, just like how Uber offered lion dances in China and Singapore for Lunar New Year. What does Uber’s potential market look like? The USD17 billion company has expanded to over 100 countries worldwide, but the bulk of its revenue comes from just five cities. In other words, Uber is clearly playing a very long-term game. It wants to get a foothold before copycats get too powerful. It has a long road ahead though. Uber will face pushback from local taxi companies as well as encounter cultural challenges. Cities like Ho Chi Minh have a peculiar luxury car culture. Most luxury black cars of the BMW and Mercedes variety are owned by the wealthy and upper middle class. They own the cars but hire the drivers so the car owners may not allow their drivers to moonlight on the side. Yet Vietnam sorely needs logistical support, and Uber can help. Companies like Giao Hang Nhanh have already grown to fill the holes, and Lazada, The Gioi Di Dong, tiki.vn, and others have invested heavily on their own logistics fleets. If Uber founder Travis Kalanik’s vision is to really bring Uber into other logistics categories like ice-cream delivery and flowers, the Vietnamese will welcome them with open arms. Ho Chi Minh City and Ha noi, both lack a train system despite desperately needing one. Uber, Grabtaxi and EasyTaxi are all easing that burden for now.

Anh Minh-Do is the editor at TechInAsia.com for Vietnam, focusing on technology startups, trends and companies. Minh is on the board of Starthub.vn – a database and forum for startups dedicated to the growth of Vietnam’s business ecosystem.