The first taxi company approved to reduce hourly fares

Hanoi Department of Transport has just approved Victory Taxi to apply flexible hourly fare reduction.

The Hanoi Department of Transport has just approved Victory Taxi to apply flexible hourly fare reductions. This is the first time a traditional taxi company has applied flexible hourly fare reductions to compete fairly with technology taxis Uber and Grab.

Hanoi Department of Transport has just approved Victory Taxi to apply flexible hourly fare reductions to compete with technology taxis.

The passenger fare declaration file that this taxi company sent to the Hanoi Department of Transport shows: The application of flexible fares with the opening fare being 20,000 VND/2.5km (about 8,500 VND/km); the fare during off-peak hours (8:30 am to 4:00 pm from Monday to Saturday) is 7,500 VND/km. The remaining time slots (including Sunday) will keep the same price until km 20, the fare will be 11,000 VND/km; from km 21 onwards it will be 9,000 VND/km; the opening price is 20,000 VND/1.8km.

With 7,500 VND/km applied during off-peak hours, Victory Taxi's opening fare is lower than the average fare of traditional taxi companies operating in Hanoi. In particular, Victory Taxi's new fare applied during off-peak hours is said to be lower than the current fare of Uber and Grab.

Specifically, Victory Taxi's fare of 7,500 VND/km (off-peak) is lower than UberX fare in Hanoi (8,000 VND/km, not including time fee of 400 VND/minute) and Ho Chi Minh City (8,500 VND/km, not including time fee of 450 VND/minute).

Compared to Grab Car, Victory Taxi's fare is also more competitive. While the current Grab Car fare in Hanoi is at 8,500 VND/km and 400 VND/minute (calculated based on GrabCar's travel time); in Ho Chi Minh City it is 9,000 VND/km and 300 VND/minute, Victory Taxi's opening fare is the same as GrabCar's opening fare, but Victory applies this price for 2.5 km, while GrabCar charges this price for 2 km.

According to the Transport Management Department (Hanoi Department of Transport), flexible price adjustments can be made in principle. However, taxi companies must demonstrate why this time frame has this price, and another time frame has another price. It cannot just be shown that the price is 10,000 VND during peak hours and 7,000 VND during off-peak hours, but must have a scientific basis. For example, what is the average speed during peak hours, what is fuel consumption, there must be a clear explanation to protect the interests of customers.