Ridesharing

Court Tells Grab To Pay Vietnam Taxi Operator For Lost Business

Grab, the leading ride-hailing company in Southeast Asia, was ordered by a court in Vietnam to pay $206,985 — or 4.8 billion dong — in a legal battle with Vietnam Sun Corp., the local taxi company that sued Grab over lost business.

According to a report in Reuters, the compensation Grab was ordered to pay Vietnam Sun, the taxi company that goes by Vinasun, ends the lawsuit between the two that lasted a year and a half. Reuters noted that the case was rare, given it marked one of the first times a taxi company sued a ride-hailing company on the basis that its entry into the market resulted in it losing profits.

Vinasum got 11 percent of the compensation it was seeking after suing Grab, contending it engaged in business practices that aren’t fair. The court found Grab ran afoul of regulations in Vietnam because it runs a taxi business and is not just a technology company. The judge, reported Reuters, found a link between Grab’s business and losses at Vinasun, but said Grab alone wasn’t to blame for the sales decrease. In a statement earlier this week, Reuters reported Grab said Vinasun needs to transform its business and shouldn’t pursue a lawsuit that is aimed to discouraging others from entering the market. “It is unreasonable for this court case to drag indefinitely just to allow Vinasun to build its case — when there’s none at all,” Grab said in the statement, according to Reuters.

The fine comes at a time when Grab is in growth mode and garnering a lot of attention from investors. Earlier in December The Telegraph reported SoftBank’s Vision Fund could invest $1 billion in Grab. That would be on top of the $2.7 billion in funding it raised in 2018 and the more than $6 billion in total it has raised from investors.  Aside from SoftBank, Microsoft, Toyota and Didi Chuxing serve as the company’s main backers.

 

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