Vinasun v. Grab

Master
Thesis on
The digital platform battle in Vietnam: The Lawsuit between Vinasun and Grab

An article analyzes the lawsuit between two major taxi companies in Vietnam, thereby
pointing out mistakes in Grab's business and suggesting improvement of the legal system
for the transport business in Vietnam.

Pham Viet My Dao
Snr.: 2038976

LL.M. International Business Law

Thesis supervisor: Erik Vermeulen, Prof.
Second Reader: Tronel Joubert, Dr.
Department of Business Law
Tilburg Law School

Tilburg University
The Netherlands
31 August 2020
Pham Viet My Dao – 2038976

ACKNOWLEDGEMENT
I would like to acknowledge everyone who played a role in my Master Thesis.

First of all, my parents and my brother, who supported me with love and understanding.
Without you, I could never reach this level of success.
Secondly, I wish to express my sincere gratitude to Professor Erik Vermeulen, Director of
the International Business Law and my Thesis Supervisor as well. Thank you for your
patient advice and guidance throughout my Thesis process.
Last, but not the least, all of my friends, thank you all for your unwavering support.
1

TABLE OF CONTENTS
INTRODUCTION 3
ABSTRACT 5
Chapter I: Market of Grab and Vinasun in Vietnam 5
I. Market strategy of Grab 5
1. Overview of Grab in Southeast Asia 5
2. Develop a fast market penetration strategy in Vietnam 7
3. The market-stimulating promotions 8
4. Change to fit with local culture 9
5. Positioning brand consistent with target customers 9
II. Situation of taxi Vinasun activities after the development of the technology taxi
companies 9
1. The drop-in sales 10
2. Competitive pressure from customers 10
3. Service quality and brand image decreaes. 11
4. Fierce competition with the technology taxis 12
5. The difficulty from the instability of raw material prices and market shares 13
Chapter II: The main content of the lawsuit between Grab and Vinasun 14
I. Overview of the lawsuit 14
1. Leaders of Vinasun and Grab's views on the lawsuit between the two parties 14
1.1. The opinions of Vinasun leaders 15
1.2. The opinions of Grab leaders 16
2. The reason Vinasun pointed out to claim compensation from Grab 17
3. Grab's stance on Viansun's argument 20
II. Conflicts around the lawsuit 20
1. The persistent lawsuit between Vinasun - Grab: Is it like the European court trial
with Uber? 20
1.1. European Court of Justice for Uber 20
1.2. The lawsuit between Vinasun – Grab compares to the case of Uber in Europe 22
2. Does Grab operate a taxi transport service? 23
3. Grab - not just technology 25
4. Vehicle-calling application identifiers: Technology or transportation? 26
III. Fierce debates about Vinasun's damage 28
1. Grab was requested to compensate Vinasun for 4.8 billion VND 30
2. Grab disagree compensate Vinasun 33
3. Vinasun asked Grab to pay additional compensation of 36 billion VND 33
IV. Grab officially compensates Vinasun 36
Chapter III: Influence of the case on Vietnam's market and legal corridor. 38
I. The assessment of insiders and outsiders with the lawsuit between Viansun and Grab 39
1. A legal perspective on Grab's business model 39
2. Winning Grab lawsuit means a lot to Vinasun? 40
3. Customers benefit from the lawsuit between Vinasun and Grab 41
II. Remove difficulties for enterprises 41
1. Vinasun sued Grab - an unprecedented story 41
2. Improving the Vietnamese legal system after the lawsuit 42
3. The introduction of Decree 10/2020 / ND-CP, regulating business and business
conditions by auto transport 44
4. Lessons for technology taxi companies after the lawsuit between Grab - Vinasun and
the introduction of the Decree 10/2020 / ND-CP 46
III. Era 4.0 and legal problems posed on the Vietnamese market 47
CONCLUSION 50
REFERENCES 51

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INTRODUCTION

Transport market is inherently not too strange in any country, especially for developing
countries, the demand for using services of people is increasing. Because of that essential
need, traditional forms of the transportation business and new technologies are trying to
understand potential markets for investment and development. Vietnam is a country
with great economic potential, so many technology companies want to invest in this
market and develop business here.

Grab is a transportation-related technology company, established in Southeast Asia, with
a stable and robust market. Grab officially entered Vietnam in 2014 and quickly has a
permanent and prestigious position with Vietnamese customers, especially as the
development of new technology electronics is getting higher and higher. It's undeniable
that Grab has brought a new trend in the transportation business in Vietnam. But that
development is a threat to traditional transportation companies in Vietnam, one of which
is Vinasun - the giant of taxi transport in Vietnam.

Before Grab, Vinasun was always one of the most popular and sustainable taxi service
companies. But because of the presence of new business forms, Vinasun gradually lost its
market share and customers, faced a complicated situation, decreased sales, even the
deadlock marketing strategies affect the company's image in the eyes of its customers.
These reasons have caused a business conflict between Vinasun and Grab.

The culmination of the conflict was the lawsuit between Vinasun and Grab in June 2017.
So, the reason why Vinasun sued Grab? What legal loophole led to this lawsuit? How did
the lawsuit happen, and what was the outcome? Is this a platform to build a legal corridor
for companies like Grab to develop the market in Vietnam?

In this thesis, I will assess from a personal perspective the lawsuit between Vinasun and
Grab, the actual factors leading to the incident, the views of insiders and outsiders on the
18-month trial. The methodology used in the article will be collected from the specific
events that happened between Grab and Vinasun, recorded from the media and relevant
state agencies. Thence the collected information will be evaluated from the perspective
3

of insiders and outsiders; The last step will be the analysis of the legal consequences of
the incident, thereby giving personal opinions about this case.1

The article will include the following content:

A. Market of Grab and Vinasun in Vietnam
This section will briefly describe the business markets of the two companies, which
made Vinasun suddenly lose its position in the Vietnamese market.

B. The main content of the lawsuit between Grab and Vinasun
The details and reasons related to the case will be discussed further in this section.
There will be controversy over why Grab was sued. Does Vinasun have grounds to sue
Grab? What were the results of the case?
Is it like the European court trial with Uber?2

C. Influence of the case on Vietnam's market and legal corridor.
How has the outcome of the case influenced the legal system for a particular business
model like Grab? Judgments from the legal perspective of the experts on this case.
What do consumers get after a dispute between the giants of Vietnam's trucking
industry?
1 Due to the relatively new nature of the lawsuit, many confidential documents are not disclosed, so the
sources of reference in the article will mainly come from the official newspapers in Vietnam, blogs of some
individuals working in the relevant fields (Lawyers, economists, etc).
2 Court of Justice of the European Union, PRESS RELEASE No 136/17, Luxembourg, 20 December 2017,
"Judgment in Case C-434/15 Asociación Profesional Elite Taxi v Uber Systems Spain SL"
4

ABSTRACT

Grab's appearance with the business model of "technology taxi" in Vietnam has led to a
profound change in the taxi transport market, and at the same time led to controversies
about how to manage. Currently, in Vietnam, there is only Decree 86/2014 / ND-CP, on
business and conditions for transportation business by auto, but this Decree is no longer
suitable for the new situation. There has been much controversy surrounding the Grab
identity story, culminating in the lawsuit where Vinasun is the plaintiff, suing Grab for
causing severe economic losses up to 41.2 billion VND (equivalent to USD 1.8 million).
The lawsuit lasted more than 18 months with many controversies occurring not only
from the two companies but also from the traditional transporters and other technology
taxi firms. The People's Court of Ho Chi Minh City, the unit accepting the case, has
repeatedly issued a decision to postpone the trial because there is insufficient evidence
to accuse Grab. After many first-instance trials and appeals from Grab, the Court has
issued a ruling that Grab must compensate 4.8 billion VND (~ USD 208.000) for Vinasun
based on verified evidence, inspection. The trial closed, but behind it was unfinished
discussions to introduce a legal framework for technology taxi companies like Grab in
Vietnam.
Chapter I: Market of Grab and Vinasun in Vietnam

I. Market strategy of Grab

1. Overview of Grab in Southeast Asia

In developed and developing countries, ride-hailing has become a daily application in
Southeast Asian countries. The region's online economy is fueled by an increasing
number of internet users and growing dependence. A 2018 report by Google and
Temasek3 shows that the internet economy in Southeast Asia has reached the $ 72 billion
mark of total transaction value (GMV). In which, online travel, e-commerce, online media
and ride-hailing are the leading ones.

3 "e-Conomy SEA 2018: Southeast Asia's internet economy hits an inflection point", 3rd edition of e-Conomy
SEA by Google & Temasek, our research on Southeast Asia's internet economy
5

Over the past seven years, Grab's mobile ride-hailing4 service has grown exponentially in
eight countries in Southeast Asia. 2018 was a significant milestone for the company when
it acquired the entire service segment in Southeast Asia by competitor Uber. Now, Grab
has become a "decacorn"5 company (a start-up valued in excess of $ 10 billion) with a
valuation of nearly $ 14 billion, after receiving $ 1.46 billion for its ongoing Series H
funding round. from SoftBank's Vision Fund.

With Grab, users can mostly swipe an app on their mobile device to rent anything that
runs on the wheel. The company has introduced more than 10 types of ride-on-demand
services, including taxis, private cars, car sharing, bike sharing, shuttle and motorbike taxi
services, with more than 2.8 million drivers in charge more than 6 million requests per
day. In fact, this company is also doing research, aiming to provide everything in the field
of consumer services.

Advertised as a super-app model, Grab has penetrated many other consumer service
sectors such as hotel booking services, video-on-demand platforms, ticket purchases,
food ordering, and grocery shopping. In addition, Grab also provides financial services.
This model is believed to have been pioneered by Chinese multinational corporations,
such as Alipay and Tencent's WeChat. Currently, Grab is one of the leading companies in
this model. The company generated more than $ 1 billion in sales in 2018 and hoped to
double by 2019. In January 2016, GrabTaxi was renamed Grab, the co-founders claim this
rebranding is about wanting to reflect all the industries in which this company will
operate.

In January 2016, Grab launched its QR code-based mobile payment service, GrabPay. This
service is currently operating in 6 countries in Southeast Asia: Singapore, Indonesia,
Philippines, Malaysia, Thailand and Vietnam. This payment service (in addition to
accepting payments for Grab trips) can also be used for in-store purchases, food delivery
and money transfers.

4 Frey, B. (2020). Platform labor and in/formality: organization among motorcycle taxi drivers in Bandung,
Indonesia. Anthropology of Work Review.

5 D. N. Malau, A. D. Setiawan and A. Hidayatno (2020), "Model Conceptualization on Startup Company
Development and Valuation in Indonesia," 2020 IEEE 7th International Conference on Industrial
Engineering and Applications (ICIEA), Bangkok, Thailand, pp. 298-302.
6

Grab has also moved into providing loans and insurance services as part of its "Grow with
Grab' roadmap" strategy. The company currently provides loans to small-medium
enterprises, as well as micro-insurance for drivers in Singapore. Grab ensures to have
built a merchant network that includes more than 600,000 sellers. Southeast Asia's
insurance market is the 6th largest, with a valuation of $ 100 billion.

In May 2018, Grab officially launched its food delivery service, GrabFood, as part of its
strategy to become a daily super app. The company aims to dominate the food delivery
market in Southeast Asia, and is expected to reach 13 billion USD by 2020, an increase of
6 times. GrabFood is present in over 200 cities in 6 Southeast Asian countries, and uses
GrabPay for payment. Grab's driver-partners often double their income by becoming
GrabFood's delivery partner. One of the company's senior executives claims GrabFood's
revenue has grown 45 times between March 2018 and December 2018.

On February 27, 2014, the Grab app was launched in Vietnam as GrabTaxi. And after
nearly 2 years of operation in Vietnam with a range of services, such as GrabTaxi,
GrabBike, GrabCar, GrabExpress, was born to serve all transportation needs of
Vietnamese people. The time when Grab entered into Vietnam was when Uber was
dominating the market and had an advantage.
So, how did Grab use its market penetration strategy?

2. Develop a fast market penetration strategy in Vietnam

Features Vietnam's market is abundant, with nearly 92 million people. At the time of
launch, Grab was an unfamiliar name to the Vietnamese market because, at that instant,
there was only one technology taxi company on mobile devices, Uber6. However, it
seemed fortunate that at that occasion, technology applications were becoming more and
more used by Vietnamese people due to the rapid development of the Internet and the
smartphone boom, which was just the right time not only to Grab but maybe other tech
taxi companies will come to Vietnam.

6 Anh-Minh Do, 26 Feb 2014 :“GrabTaxi enters Vietnam, intensifying the battle for mobile taxi booking apps”,
from https://www.techinasia.com/grabtaxi-enters-vietnam

7

With the application of that market penetration strategy, Grab chose a quick entry
strategy - a short-term market entry strategy, which brought the product to market from
the outset with low prices but still invest heavily in promotional activities.

It can be said that this is the most suitable strategy to penetrate the international market
for Grab. Because the Vietnamese market is very price-sensitive, the motorbike taxi
service is not different between traditional motorbike taxi and technology motorbike taxi
so customers will choose their party to give preferential prices.

The threat of large potential competitors that will penetrate the Vietnamese market has
also put pressure on Grab to set a target to grasp quickly.

3. The market-stimulating promotions

Previously, the habit of using taxis and motorbike taxi of Vietnamese people was only
when it was urgent, it was not convenient to drive by themselves, then they used taxi or
motorbike taxi. Grab's strategy is clear, first, they spend money to run promotions with
very preferential prices and discount codes every day. Customers ride at a low cost, go
short are long gone, gradually they become familiar with Grab. Drivers have more orders,
although customers pay less, but offset the discounted price will be compensated for
drivers after completing the trip. When the number of buyers and sellers is large and
familiar with Grab, it has changed the habits of the Vietnamese market.

The cost of joining and withdrawing is zero, so many people buy cars to enter the Grab
team, along with many people who are also running Grab cars to earn more. The market
is advancing towards a multitude of sellers, along with gradually getting more buyers.

The product is entirely homogenous, challenging to make a difference. Every ride you do,
all converted into a fixed price frame. Information is perfect thanks to knowing in advance
the distance travelled, the amount corresponding to the range, type of vehicle, license
plate, so on. Avoid the taxi driver can go around to earn more. Moreover, with features
reviews after each trip, customers will be doing Grab care if customers are not satisfied
with the driver.

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4. Change to fit with local culture

In Southeast Asia, the majority of the population has a habit of using cash. As a result,
Grab has allowed customers to choose to pay with cash or bank account.

Unlike Uber, which only entered the Vietnamese market when it required payment by
bank accounts only to make it difficult for users, Uber accidentally ignored customers
who did not have a habit of using credit accounts. As a result, Grab expanded its market
quickly by adapting and understanding the patterns of Vietnamese people.

5. Positioning brand consistent with target customers

Grab positions itself as a casual brand, so instead of creating marketing campaigns that
make people admire, Grab focused on reminding people to remember Grab when booking
a car.

Grab has a distinctive green colour, the brand's colour ranges from the brand identity to
the motorbike taxi drivers' uniform to make it easier for customers to recognize Grab.
Grab's green colour gives the viewer a sense of closeness and friendliness.

As a new brand entering the Vietnam market, only after 4 years Grab has captured the
market share in Southeast Asia, defeating Uber even though Grab is a latecomer. Thanks
to the market penetration strategy associated with the right brand strategy, meeting the
needs with market characteristics and competition, the positioning is consistent with
customer insight from which offers product and distribution strategies. Especially, Grab's
reasonable price and promotion have been entirely successful with the approach to
penetrate the Vietnamese market.

II. Situation of taxi Vinasun activities after the development of the
technology taxi companies

Vinasun is Anh Duong Vietnam Joint Stock Company with charter capital of USD 350,000,
established on January 27, 2003, under the name Vinasun taxi. Vinasun has become one
of the largest taxi companies in Ho Chi Minh City, with a car, 55 fleets and 6,196 drivers.
The company focuses on expanding operations outside Ho Chi Minh City. By June 2015,
9

Vinasun received awards such as the most favourite Vietnamese brand, Top 500 largest
private enterprises in Vietnam, and Top 50 most productive companies in Vietnam.

1. The drop-in sales

Established in 2003, Vinasun is a traditional taxi company with the largest market share
in Ho Chi Minh City. However, by 2015, after a year with Uber and Grab, Vinasun began
to realize the competitive pressure when Uber and Grab's wedding prices were lower
than traditional taxis. Therefore, Vinasun has launched the Vinasun App to call cars to
compete.

However, Vinasun's profit in the first three quarters of 2016 still decreased7. To keep
drivers from transferring to Uber and Grab, the company introduced a policy of
increasing discounts and incentives for drivers.

By February 2017, the financial statements of 20168 showed that Vinasun's revenue did
not meet the plan, the profit decreased slightly. Shortly after that, Vinasun attracted
attention when putting the green grapefruit business on taxis. The grapefruit sold in the
car is all grown by the company. This way is how Vinasun boss wants to help taxi drivers
to increase income in the context of declining corporate profits.

In June 2019, Vinasun said more than 4,000 workers were leaving their jobs, hundreds of
cars were in the yards9. In this situation, Vinasun taxis are studying to switch to a rental
car model - a significant response to technology taxis such as Uber and Grab.

2. Competitive pressure from customers

7 Vinasun Financial statements of 2016 from

https://static2.vietstock.vn/data/HOSE/2016/BCTN/VN/VNS_Baocaothuongnien_2016.pdf (In
Vietnamese)
8 Id.
9 Vinasun Financial statements of 2019 from

https://static2.vietstock.vn/data/HOSE/2019/BCTC/VN/QUY%202/VNS_Baocaotaichinh_6T_2019_Soat
xet_Congtyme.pdf (In Vietnamese)

10

Customers always want to maximize the benefits of the service with the lowest cost, still
want the service to be more and more quality, but the price must be reduced. They are
always aware of their negotiating advantages. Some types of customers are as follows:

- Customers are pupils, students, low-income people: Focusing on price services, not
on services.

- Customers are average income, office workers, so on: They just care about the price
of the service and need some other requirements such as pick-up time, driving time.

- Customers who have high income: They do not care too much about the price, but
need excellent service, the ability to minimize time, minimize payment stages, the
enthusiasm of the driver.

Referring directly to the current situation of Vinasun, the taxi fare of this taxi company is
relatively suitable for customers. Prices and services offered are all approved by the
customer. It can also be seen that Vinasun is less pressured from customers compared to
traditional taxi companies. But Grab is cheaper because of the foreign taxi companies'
business strategy that has led customers to switch to this company gradually. Thereby
posing challenges Vinasun must solve the ability to choose cars from customers because
of Grab's strength in price strategy.

3. Service quality and brand image decreaes.

Service quality of Vinasun is still a problem. In a recent survey, 72% of customers were
dissatisfied after using this taxi service, and up to 38% rated Vinasun's service attitude
as not useful. Perhaps this is what Vinasun does not want, with the number of vehicles up
to thousands, it is difficult for them to get an overview of their service situation regularly.

On the other side of the front line, Grab not only provides the convenience of using the
product, but they also know how to build the quality of service by giving consumers more
power when assessed and comment on the quality of the trip through its application
platform - something that consumers in Vietnam rarely enjoy. However, saying that does
not mean that Vinasun cannot do it, they have it for themselves. An application platform
11

to make it easier to collect information. As long as Vinasun exploits more strongly, this
application will bring positive results for Vinasun in building services.

4. Fierce competition with the technology taxis

"Technology Taxi"10 is the term for a form of taxi using a smartphone application such as
Uber, Grab, and has entered the Vietnamese market from 2014. At the time of joining,
there were many views that "technology taxi" would be difficult to exist in Vietnam due
to lack of driver supply.

Taxi booking application can be successful in developed countries where cars are the
conventional means of transport, while in Vietnam the average income is low while high
car prices make cars considered valuable assets, car owners have a decent income.
However, the success of this form up to now has pushed the traditional taxi into a passive
position, completely changing the competition in the industry.

In the taxi business, three factors are considered to influence customer choice decisions:
convenience, fare, and brand. With the feature of no need for gearbox lights, cash register,
logo, paint color registration ..., easy way to join, no brand recognition makes the ability
to increase unlimited number, anyone with a car can become a taxi driver, making Grab
a much more extensive coverage than traditional taxis. Barriers to entering the industry
were quickly removed.

Responding to the new trend, in parallel with maintaining telephone channels, waving
directly, Vinasun built a taxi call application "Vinasun App". Tested from 2015, deployed
to massively from 2016 on all of its taxis, is expected to provide customers with a similar
experience with Grab's app. However, up to now, this application is not really practical
when it has not brought outstanding benefits to consumers.

In terms of freight rates, Grab still shows its absolute advantage, due to the reduction of
many taxes, fees, no waste of idle vehicle fuel on the road and its strategy to dominate the
10 Tucker, E. (2018). Uber and the Unmaking and Remaking of Taxi Capitalisms: Technology, Law, and
Resistance in Historical Perspective. In Tremblay-Huet S. (Author) & McKee D., Makela F., & Scassa T.
(Eds.), Law and the "Sharing Economy": Regulating Online Market Platforms (pp. 357-392). University of
Ottawa Press.
12

market, technology taxis are leading. Significantly lower-priced books, adjusted for peak
days/hours - weak points help attract more customers.

Vinasun said that for Grab, the fees are difficult to compare because their costs are mainly
derived from funding, in the future when the freight rates return to the actual economic
nature, when gas prices increase, freight charges will be the main competitive factor
between the Company and Grab. However, the time in the future is still not precise, in the
immediate future is always a disadvantage and customers are shifting more and more
strongly.

With the brand factor, which seems less meaningful to individual customers, is often
willing to switch to another brand with competitive prices and shorter taxi waiting times.
As for the business group, although this is the advantage of Vinasun when combined with
the issuance of taxi cards, having full invoices is something Grab has not done, but the
size of this group is quite small compared to the group of individual customers.

Capturing consumer psychology and also Grab's advantage is that when going to
weddings, birthdays, meeting partners, stepping out of a "luxury car" gives customers a
feeling of luxury, more confident than a regular taxi, Vinasun focuses on new investment
in Vcar application including luxury cars without signs and taxi logos. However, this is a
new project, requiring big costs while the revenue has not been able to offset the costs,
not yet bringing in profits.

With the emergence of new technology, the protective barriers for the industry have
almost erased, creating competitive pressure not only with Vinasun but also all
enterprises in the passenger transport business. Vinasun is considered as a responsive
unit in response to changes in the business environment, but has not yet achieved a new
breakthrough, but mainly "simulates" the existing strengths of Grab.

5. The difficulty from the instability of raw material prices and market shares

Raw material price is also a risk for Vinasun. In 2016, gasoline prices increased by 1,190
VND / litre (~ USD 0.05), equivalent to 7.26%, and from the beginning of 2017, world
gasoline and oil prices were still in an uptrend. With an average consumption of 21
liters/day on 4-seater car, 27 liters/day on 7-seat car, Vinasun consumes more than
13

155,000 litres of gasoline every day, estimated at 350 VND / litre (~ USD 0.015) during
the petrol price increase. Vinasun's fuel cost will increase by about 54 million VND / day
(~ USD 2300). How to change prices to match frequent fuel price fluctuations, raise rates
to offset costs or keep prices to maintain market share is also a difficult problem for
Vinasun.

Facing negative forecasts about business prospects, on the listing floor, the market price
of VNS shares has continuously declined, losing more than 40% of its value since mid-
September 2016 up to now. With earnings per share (EPS) in 2016 reached VND 4,570 /
share, Price-Earning VNS is currently only 4.8 times more (This is quite a bit lower than
the average level of the general market).

After a period of rapid and robust decline, the market price of Vinasun shares can find an
equilibrium point, however, recovery and growth will entirely depend on the ability to
maintain and increase business efficiency in time. Next, for shareholders and investors,
bottom fishing or long-term holding of this stock is probably also something to consider
in the context of current uncontrollable fluctuations in the business environment.

How Vinasun can stand firm and grow is a question that needs answers from the business
leaders, as well as concerns from ministries and agencies that have allowed Grab to be in
the country.

Chapter II: The main content of the lawsuit between Grab and Vinasun

I. Overview of the lawsuit

The evolution of Vinasun's lawsuit against Grab claims 41.2 billion VND (equivalent to
USD 1.8 million) has become the focus of public opinion and technology community from
June 2017.

1. Leaders of Vinasun and Grab's views on the lawsuit between the two parties

Sharing with Tuoi Tre Online newspaper, leaders of two companies gave their stances
and views on this noisy lawsuit.
14

1.1. The opinions of Vinasun leaders

With the viewpoint "People say that without models like Grab entering Vietnam, taxi
companies will not innovate", Mr. Truong Dinh Quy, Deputy General Director of Vinasun
said frankly, Vinasun recognizes that the survival of innovation and creativity lies in many
aspects, from administration to planning - business. And Vietnamese enterprises are also
very aware of this in the process of development and integration.

The Vinasun App is also based on artificial intelligence and big data. Passenger transport
by taxi is one of the qualified businesses and must meet 13 conditions, including driver
identification, black box, checkout meter, printing machine, application, etc. This is an
excellent effort of domestic enterprises. Vinasun's app has integrated those functions.

The substance of the Vinasun lawsuit with Grab is to claim damages outside the contract,
this is a violation of the law in the transport business. From this violation, there is a basis
to prove that Grab is violating the laws of the Law on Commerce, Labor, Finance, including
the Enterprise Law or the Foreign Investment Law.

Up to now, Grab still argues that Project 2411 of the Ministry of Transport is the only
decision related to the operation of this company. This is a misconception because the
Vietnamese legal system operates under a completely different process.

Vinasun said that if based on the Competition Law, it seems a bit narrow. The company
wants the origin of the lawsuit to be from the interests of the domestic business
community and employees, and the interests of consumers. But the emphasis is on the
fact that Grab's operations are against the law, causing damage to society, not merely
unfair competition.

Vinasun claims never to oppose the trend of technology development and put them into
an application. That is the inevitable trend of life, of the progress that takes place not only
in the economic field but in all aspects of life. However, from software that connects and
11 Decision 24/QD-BGTVT dated 7/1/2016 of the Ministry of Transport on the pilot implementation of
science - technology application, Support for management and connection of passenger transportation
under the contract, i.e. providing software for transport business units.

15

spawns an intrinsically incorrect business model is another matter. That is the story of
the electronic contract car that proves that no electronic contract exists.

Enterprises with this middleware software have used unhealthy ways to distort the
business model with many consequences.

1.2. The opinions of Grab leaders

On the representative of Grab Vietnam, when asked for his opinion on the lawsuit
between Vinasun and Grab, Mr. Nguyen Tuan Anh, President of Grab Vietnam shared that,
Grab complies with all legal regulations, and always does things that are not prohibited
by law. Lawsuits in international business are also common, company are also mentally
prepared for this. The change between the old and the new always creates "aftershocks",
if not Grab, there are other companies to do this. The money is not Grab's, it belongs to
the investors. If you want to make a lot of money, you must make people make money
and customers are happy, you must create a positive impact on the society as well. Grab's
shared economic model of transportation has effectively used its idle resources and is
about to start to make a profit.

According to Mr. Nguyen, users are the managers of Grab vehicles, through the rating
system, they choose who can continue to practice and who must be fired. Grab is the only
one providing the solution for this.

Sharing more about Grab's business model, Grab VN CEO Jerry Lim said that businesses
like Grab are not transportation businesses. To be more precise, transportation is just a
small business that Grab is doing. The current trend is that companies are trying to serve
the different needs of a customer adequately, they form an ecosystem that offers
convenience, convenience and increased service value through a digital platform.

In particular, Mr. Jerry also shared that Grab wants to cooperate and become a technology
partner with Vinasun, ready to support local businesses to develop together, with
opportunities for success. In the process of expanding its business, Grab is still looking
for potential businesses that add value with technology. Companies with traditional
business models must dare to change or receive new things.

16

The "great war" between Grab and Vinasun is considered an uncompromising battle
between technology taxis and traditional taxis. But, since entering Vietnam, Grab has
cooperated with many conventional taxi companies, bringing practical effects to both
sides. Launching a new market called GrabTaxi, Grab is a software supply model for taxi
companies to expand the audience of users. Accordingly, small and medium taxi
businesses that do not have enough software development potential have chosen to link
with Grab to increase their chances of connecting with customers. Technology is the
needs and trends of consumers. If traditional taxis do not change, catch up with new ones,
they will become obsolete and cannot meet the needs of passengers. Besides, Grab is also
a reputable unit, reputable and position in the market so that it can be wholly trusted.

Launched in 2016, Grab and Uber are the first names for the penetration of the sharing
economy model, of the 4.0 Revolution in Vietnam. Not only limited to the transport
industry, Grab with its ecosystem has been building a multi-application super service,
bringing the sharing economy to all aspects of people's lives.

After 4 years of piloting, Grab has become the number one booking platform in Vietnam
by capturing up to 73% of the market share (in terms of total completed trips). GrabFood
food delivery platform is used most often in Vietnam with the number of deliveries
growing by nearly 1,800% in 2019. GrabExpress is also one of the fastest-growing freight
forwarding platforms in Vietnam, with a remarkable growth rate of 97%. And in 2019,
the total volume of payment transactions via Moca wallet on the Grab app increased by
131% the number of monthly interaction users increased by more than 121%. As of
November 2019, up to 43% of transactions on the Grab platform were made in the form
of cashless. At the same time, this application also helps improve the quality of life for
hundreds of thousands of partners participating in the Grab technology connection
platform. The proof is that the monthly income growth of the average partner is 51%
higher than that of the national average.

2. The reason Vinasun pointed out to claim compensation from Grab

According to the trial schedule announced at the Ho Chi Minh City People's Court, this
unit has scheduled to bring a dispute over compensation for non-contractual damages
between the plaintiff, JSC Vietnam Anh Duong (Anh Duong Company) - the owner brand
VinaSun to the defendant, Grab Taxi Vietnam Co., Ltd. (GrabTaxi), went to trial at first
17

instance on September 24, 2018. The trial reopened in September continued to be
postponed due to the absence of Grab representatives because "are complaining about
the results of the Vinasun damage assessment" to the Chief Justice of the High People's
Court in Ho Chi Minh City.

On October 17, the Ho Chi Minh City People's Court reopened the trial of the Vinasun case
against Grab. On the afternoon of October 23, 2018, the People's Procuracy of Ho Chi Minh
City had a view to accepting the entire petition of Vietnam Sunshine Joint Stock Company
(Vinasun) requesting Grab Vietnam Co., Ltd. (Grab) must compensate more than 41.2
billion VND (~ USD 1.8 million), and must compensate once.

Previously, the trial took place on March 7, 2018, at this hearing, the Court ended with a
decision to suspend the trial for the parties to continue to add evidence and records.

The situation at the trial on March 7 showed that Vinasun (the plaintiff) said that the audit
documents showed that the profit in 201612, the first and second quarter of 2017 of
VinaSun was lost 75 billion VND (~ USD 3.2 million)13.

As analyzed by VinaSun, in a document issued by the Department of Transport of Ho Chi
Minh City, as of June 2017, GrabTaxi registered 12,913 vehicles, accounting for 54.25%
(Uber had 10887 cars, accounting for 45.75%). The total damage caused by GrabTaxi to
VinaSun in 2016, Q1 and II / 2017 amounted to 41.2 billion VND (~ USD 1.8 million).

According to Vinasun's petition, Grab operates in the Vietnamese market through
Decision 24/QD-BGTVT dated 7/1/2016 of the Ministry of Transport14 on the pilot
implementation of science - technology application. But Vinasun said that in fact Grab is
a taxi transport business, a field in the same category as Vinasun. Since then, Grab
committed violations of the law, swapped the concept, causing severe damage to
Vinasun's revenue and profit, so the company sued and asked Grab to pay compensation
for 41.2. billions VND (~ USD 1.8 million).
12 Vinasun Financial statements of 2016
18

When giving the opinion, the representative of the Procuracy affirmed that there is
enough basis for identifying Grab as a valid business owner in the passenger transport
business by taxi. Specifically, with the Decision 24/QD-BGTVT of the Ministry of
Transport, Grab is the supply of software for business units of transport but in actual
operation and during interrogation, arguing in Court, Grab is not merely a connection or
software vendor. The representative of the Procuracy said that Grab took advantage of
Decision 24/QD-BGTVT of the Ministry of Transport to entirely run a taxi transport
business process, similar to Vinasun.

Besides, according to the first business registration certificate (changed for the 6th time
on May 23, 2018)15 and the national business registration portal, as well as in Grab's
charter all show that the registered business line is "transport of passengers by road in
the inner city and suburbs (except buses)". Since then, Grab has taken advantage of the
pilot, directly doing business, directly operating the vehicle, appointing the driver to pick
up passengers, deciding the fare and adjusting the fare increase or decrease, collecting
money directly from customers via Credit card, organize promotions, directly receive
driver registration documents for Grab program, issue driver reward and penalty
regulations, connect with banks to help drivers borrow 90 % value of car and buy
voluntary accident insurance for passengers and drivers. The representative of the
Institute of Supervision pointed out: "From the legal and actual basis of Grab's
transportation business, there are enough grounds to identify Grab as a taxi transport
business. Meanwhile, based on the financial statements of 2015, 2016 and 2017 audited
and provided by the Tax Department of District 5 (Ho Chi Minh City) for Vinasun, the
company has shown profit from 2016 and the first 6 months of 2017 declined following
Vinasun's claim ".

In addition, based on the qualifications established for customers using Grab services,
Grab has illegal promotional acts such as: the total time of the promotion program by
discounting in excess of 90 days/year; promotion cannot exceed 45 days.16 At the same
time, Grab has violated when it is not confidential to customers' information, signing
cooperation contracts with enterprises outside the pilot area.
15 According to information found at the National Business Registration Portal in Vietnam, from
https://dichvuthongtin.dkkd.gov.vn/inf/Forms/Searches/EnterpriseInfo.aspx?h=9ef9

16 GrabTaxi's promotional conduct violated Article 101 of Vietnam's Commercial Law; Article 4, Article 39
of the Vietnam Competition Law
19

Some figures show that Vinasun suffered damage in the taxi market, including research
results showing that 40% of Vinasun customers switched to Grab's services. According to
an inspection report of Cuu Long Company, the number of Grab cars is nearly 13,000
vehicles. Therefore, the People's Procuracy of Ho Chi Minh City suggests that the Judicial
Council of the Ho Chi Minh City People's Court accept all Vinasun's claim.

3. Grab's stance on Viansun's argument

On the Grab side, after unfavourable developments in Court, Mr. Jerrry Lim - Director of
Grab Vietnam expressed his disappointment at the request of the representative of the
People's Procuracy of Ho Chi Minh City. According to Mr. Jerry Lim, representative of the
People's Procuracy of Ho Chi Minh City asked the Court to approve the damage
assessment report of Cuu Long Appraisal - Inspection Joint Stock Company and did not
accept Grab's request to supervise. Even though Grab and Grant Thornton - an
internationally recognized and reputable independent audit company, pointed out the
very fundamental flaws in Cuu Long's report that any ordinary person would place
question.

The Director also shared that Grab's business in Vietnam could not be the only and direct
cause that caused Vinasun's profit decline. He said that it is unreasonable for a technology
company like Grab to be punished for having superior technology over traditional
business models to bring a better life to all Vietnamese people. Mr. Jerry Lim also
expressed his opinion, Grab is still optimistic in the first instance judgment of the Court
expected to be declared on October 29, 2018, because Grab believes that the Court will
protect the best interests of the people, not for the sake of the group, are trying to keep
the traditional business model and refuse to innovate in the industrial revolution 4.0.

II. Conflicts around the lawsuit

1. The persistent lawsuit between Vinasun - Grab: Is it like the European court
trial with Uber?

1.1. European Court of Justice for Uber

20

In October 2014, Uber Systems Spain - a subsidiary of Uber was sued by Taxi Elite17, a
professional taxi driver association in Barcelona, to violate the Spanish law, showing
signs of wrongdoing and Unfair competition. Later, the Spanish Court confirmed that
Uber Systems Spain connects with amateur drivers to provide Uber software to help
drivers connect with people who have urban travel needs and also be the person that
access to the service through this software. The Court also confirmed the operation of
Uber Systems Spain is for profit.

However, due to the case involving many European countries and the general law of the
European Community as well as international flatform software of Uber, the Spanish
Court decided to suspend the case in Spain and asked the European Court of Justice (ECJ)
to make a first instance judgment.

December 20, 2017, the ECJ's Grand Chamber ruling said: "Intermediation service
provided by Uber is based on the selection of nonprofessional drivers using their own
vehicle, to whom the company provides an application without which (i) those drivers
would not be led to provide transport services and (ii) persons who wish to make an
urban journey would not use the services provided by those drivers.”18

ECJ believes that Uber can "determine the maximum cost of transportation through the
Uber app", and "receive that amount from the customer before paying part of that amount
to the driver" as well as "having some control over the quality of the vehicles, the drivers
and their behavior ". Furthermore, in some cases Uber can "eliminate drivers." The ECJ
also said that Uber's intermediary service must be seen as "an integral part of an overall
service whose main component is transportation".19

With the above analysis, ECJ concluded that Uber's services should be classified as
"services in the transport service" 20, not as information services or connection services.
17 Ecj 20 December 2017, case c-434/15 (uber spain), Employment status: asociació n profesional é lite taxi
– v – uber systems spain sl, spanish case. (2018). European Employment Law Cases, 3(1), 74–76.
18 Judgment number 39, JUDGMENT OF THE COURT (Grand Chamber) of 20 December 2017, Asociación
Profesional Elite Taxi v Uber Systems Spain, SL.

19 JUDGMENT OF THE COURT (Grand Chamber) of 20 December 2017, Asociación Profesional Elite Taxi v
Uber Systems Spain, SL.

20 Id.
21

This ruling will be the legal basis for the Court of Spain to continue the lawsuit between
Elite Taxi and Uber Systems Spain under Spanish law.
1.2. The lawsuit between Vinasun – Grab compares to the case of Uber in
Europe

When comparing the two lawsuits between the Spanish Taxi Association with Uber
System Spain and between Vinasun and Grab Vietnam, there are some significant
differences. This makes the use of ECJ's ruling against Uber in Spain and Europe as a basis
for the case against Grab Vietnam has issues that need to be reviewed about the suitability
and reasonableness.

The first can be mentioned as the driver in two markets. With the argument that Uber
drivers are not professional Spain is one of the primary bases for the European Court of
Justice to make a first instance ruling for the lawsuit in this market. However, this base
does not really have any similarities with the Grab lawsuit in Vietnam. In Spain in
particular and in Europe in general, Uber drivers are mostly amateurs, have no license,
are not managed or licensed by any organization, and they are also not taxed.21 22 In
Vietnam, as a rule23, all driver-partners for Grab in Vietnam who want to use their cars to
transport passengers need a suitable driver's license and a license card, including: Taxi
driver's card ( for GrabTaxi), either a member of a cooperative or enterprise and have a
Business Registration Certificate related to the transport business (for GrabCar). In other
words, drivers participating in using Grab Vietnam's services are professional drivers,
belonging to organizations that have been licensed to provide passenger transportation
services.

Similarly, there are also significant differences in legal terms. Specifically, in the Spanish
market as well as Europe, Uber is not subject to the same laws, they are almost free until
the above lawsuit. Meanwhile, in the Vietnamese market, Grab Vietnam is being identified
as a technology company, providing services, applying science and technology to support
management and connecting passenger transportation. According to the Electronic
Transactions Law and the Law on Commerce, Grab Vietnam is a company that provides
21 Id.
22
Marin, J., Petrović Sinisa, Mudrić Miš o, & Lisič ar Hrvoje (Eds.). (2020). Uber--brave new service or unfair
competition : legal analysis of the nature of uber services.
23 Article 67, Law On Road Traffic Of Vietnam, No. 23/2008 / QH12.
22

an e-commerce trading platform in the form of websites and apps for mobile phones and
smartphones, allowing drivers from applications offer transport services.

Based on these regulations, Grab Vietnam side believes that they are operating as an e-
commerce intermediary, which connects transactions between drivers, transport
businesses and passengers in the exchange. e-commerce, according to Decree 52/2013 /
ND-CP.24 In fact, before that, the competent authorities in Vietnam identified Grab
Vietnam as a legal entity providing "the application of science and technology in
supporting the management and connection of passenger transportation services. under
the contract "in the Pilot Program.

Another difference is also shown in the way Uber and Grab do business in markets.
According to an EU Court ruling, Uber Spain has decisive effects on the conditions of the
service provided by drivers (for example, maximum fares, charging from passengers
before pay a part to the driver and charge for cancellation in some instances).25 However,
Grab Vietnam does not have such decisive influences on drivers. At the request of each
passenger, the Grab Vietnam mobile application only supports notification to the nearest
driver, the driver has the discretion to accept or not for the proposed trip with the
calculated fare and recommended on Grab's electronic platform without any driver
designation in these transactions. Regarding freight rates, when customers use Grab
services in Vietnam, the prices are determined on the basis of the standard tariff
proposed by transport enterprises and cooperatives. This is the suggested fare for
passengers. Along with that, there are no fixed requirements for payment methods
between the driver and the passenger, and payment can be made in cash or by electronic
payment with the toll assistance service provided by Grab issued to the driver.26

2. Does Grab operate a taxi transport service?

In a development of the lawsuit at the end of 2018, FastGo Joint Stock Company27, the unit
providing the technology ride-hailing application - FastGo- sent a letter to the trial panel
24 Decree 52/2013 / ND-CP, Decree On E-Commerce.

26 GrabCar’s service price list from https://www.grab.com/vn/transport/car/ (In Vietnamese)
27 22 Nov, 2018, “Fastgo says Grab is not a very technological company”, from
https://neuck.com/vietnam/fastgo-says-grab-is-not-a-very-technological-company-vneconomy/
23

of the lawsuit between Vinasun and Grab, Ho Chi Minh City People's Court to provide,
clarify information about the activities of technology companies in the transport sector.

FastGo's representative said that, based on the reality of Grab operations, this is not a
pure technology company model, nor is it ultimately business brokerage nature like other
ride-hailing applications. Taking the evidence of the price, FastGo said that it is Grab who
determines the time-based trip price (Surge Price model) based on algorithms that at
times can increase 3-5 times. Compared to normal, this fare is entirely unknown, but only
displayed to customers when booking. If you are merely an intermediary, the fare must
be decided by the seller (being the driver) according to the market principle, so Grab is
not only an intermediary. "In this case, Grab sells the transportation service to the
customer first and receives the revenue to the company, then hires the driver to provide
the service to the customer, paying the driver a portion of the fee about 70% of the
collected customers' fee ", according to the FastGo provided document. According to
FastGo's argument, the technology company only provides technology services to many
companies in specific fields, but cannot decide the selling price.

Previously, on the afternoon of October 23, in the proceedings between Vinasun and Grab
in Court, the representative of the Procuracy said that it is necessary to accept all
Vinasun's lawsuit request, forcing GrabTaxi to compensate with the amount of more than
41.2 billion VND (~USD 1.8 million). The representative of the Procuracy said that there
is enough basis to confirm that Grab is a taxi transport business, doing business in
contravention of Project 2428, violating the Law on Enterprises 2014 on false declaration,
so we propose to accept all Vinasun's claim set.

In terms of content, Grab's business registration paper represents the field of transport
business registration. Although under Project 24, Grab is only allowed to provide a
connected technology platform, the representative of the Procuracy believes that Grab
has taken advantage of Decision 24 to operate the taxi transport service such as collecting
money directly charge, manage the driver, decide the discount, reward and penalty with
the driver. In addition, the Procuracy also believes that Grab has launched many
promotions, including a 0-VND ride. The representative of the Procuracy stated that there
24

are enough grounds to identify Grab as a valid business owner in the passenger transport
business by taxi.

From the lawsuit files, the Procuracy said that Grab did not do business under Project 24,
violated the Enterprise Law 2014 on the false declaration, so Vinasun's request to sue
Grab for damages is grounded.

3. Grab - not just technology

It must also be recognized that what Grab has is not only technology or policy support,
but the decisive factor for the success of this business comes from operations
management and modern market approaches. In fact, Uber is "the father" of Grab, which
has flourished and is famous globally but still failed against Grab in Southeast Asia.

For companies like Uber or Grab, the technology factor is just the novelty that hits the
initial curiosity. And the core value of these companies is still maximizing the efficiency
of management, advertising, operation, including people thereby cutting costs, creating
advantages in price, maximizing profits. Traditional Vietnamese transportation
companies are not unable to compete with Grab and Uber. With a lot of available benefits
such as coverage, professionalism, service synchronization, the need for domestic brands
is to change the monopoly mindset, minimize costs, and provide quality services.

In fact, traditional taxis are challenging, but still have their own vitality in their market.
For example, customers even choose to take conventional cabs at peak hours when the
cost of technology taxi at that time is very high, or long distances. This is an unsurprising
choice because the highest goal of the customer is to save costs. Vinasun chose the path
to sue to Court to claim rights and aim to claim the fairness of the mechanism between
these two types of transport, some businesses have actively taken bold steps to compete
fairly with Grab.

It can be seen that businesses have different reactions and actions when business models
from abroad enter the domestic market. The fiercer competition will bring customers
more choices and low prices. As for businesses, if they want to survive, they must change
and keep up with the global development trend.

25

4. Vehicle-calling application identifiers: Technology or transportation?

Several countries in the region and around the world have "named" and introduced
appropriate management measures for operating models like Grab. Meanwhile, Vietnam
is still quite confused with this issue.

After 6 times of revision, the draft Decree replaces Decree 8629 on business and business
conditions of transport by car because the Ministry of Transport still has to give 2 options
and says "inclined" to tighten Grab management. like a traditional taxi. Specifically,
according to the Ministry of Transport, after collecting comments from many agencies
received, it must be returned in two groups. Specifically, the first group, the Government
working group, and taxi associations require that Grab operations (cars with less than 9
seats for an electronic contract pilot) should have strict regulations and be governed by
taxis. , cannot be called the type of "E-contract" because it is not in the provisions of the
Law on Road Traffic. Accordingly, all cars with less than 9 seats are used for passenger
transportation under electronic contracts, it is required to specify a roadmap for the
issuance of taxi badges and the implementation of taxi business regulations.

Meanwhile, the second group of opinions led by the Vietnam Chamber of Commerce and
Industry (VCCI) and some economists suggested that vehicles with less than 9 seats in
passenger transport with software application would be managed accordingly electronic
co-transport and electronic taxi regulations.

Considering in both groups of opinions given in the draft Decree replacing Decree 86,
operating models like Grab need to be managed like a transport business, only with a
different management method: paper contract or electronic contract. Meanwhile, for
Grab, the company still insists on declaring if "becoming a taxi company is a step
backwards of the 4.0 revolution".

According to Grab, the regulation that all providers of connecting applications and
entering into electronic contracts will be forced to become transport business units that
"go against the government's policy and direction for applying science and technology
and reforming administrative procedures”. According to Grab representatives, the
29 Decree 86/2014 / ND-CP, On business and conditions for transportation business by auto in Vietnam
26

identification of the electronic contract application contract as a taxi, and the
identification of the provider of electronic contracting and signing applications as the taxi
company is the proposal of traditional taxi business units.

While Grab insisted that it merely provided technology, many argued that it was incorrect
to consider Grab as a technology company, as a "concept swap" because it did not create
any real estate products that other companies provide their technology infrastructure.
Grab only offers ride-hailing services.

At the trial of Vinasun and Grab, this issue is also controversial and also the bottleneck
for all matters. The Grab side said that it only trades software and technology, but Vinasun
still maintains the view that Grab operates as a taxi transport business. Because even
though it doesn't own the car, a trucking business doesn't necessarily own the car, rent
it, or cooperate. Grab also determines the price, the vehicle, and the fine of the driver,
which are activities that can even be considered the core of the transport business.

If Grab is merely a technology application to connect passengers with the driver, users
use Grab to join, but where to go, how to price, how to pay free user agreement. But in
fact, the decision on the fare along with the discount of more than 20% for the driver
makes Grab greatly benefit.

Responding to the press, Mr. Khuat Viet Hung, deputy chairman in charge of the National
Traffic Safety Committee, said that services like Grab or similar are all considered
transport business, will have to comply with business regulations business and transport
business conditions following Vietnamese law. What type of transport does Grab engage
in, and must fulfil the responsibility of that type of transport. Mr. Hung also said that in
Vietnam, Grab is operating and setting freight rates, so it is necessary to confirm that they
are in the transport business. Transport services include stages, customer search, the
connection between customers and carriers, transport pricing, agreement, shipping, and
payment. Grab only buys the transportation stage, while they do the service
announcement, product name, product operation according to the quality requirements
of customers, the negotiation and payment, therefore, Grab is the transportation
business.

27

Based on the current Grab operations, it is clear that this is not a pure technology
company model, nor is it entirely business brokerage nature like other ride-hailing
applications. Grab is the unit that determines the price of a trip from time to time-based
on algorithms that sometimes may increase 3-5 times higher than average, this fare is
utterly unknown for drivers, only visible to customers when booking.

Some other opinions said that Grab is a very new and not accessible business, because it
connects so many different owners and technology activities to complete a process to
serve consumers as well as ensuring benefits for companies and partners. Therefore,
Grab is not merely the operation of a registered airline to carry passengers like a
traditional taxi, nor can it hardly be considered as providing technology. Identifying Grab
is clearly not straightforward.

III. Fierce debates about Vinasun's damage

On November 22, 2018, the Economic Court - Ho Chi Minh City People's Court continued
the first instance trial of a civil case claiming non-contractual damages between the
plaintiff is Vietnam Anh Duong Joint Stock Company - the unit that owns the commercial
Vinasun taxi brand and the defendant is Grab Taxi Vietnam Company Limited. Previously,
the trial of this case ended the argument, the trial panel deliberated, expected on October
29, 2018, to pronounce the sentence, but then did not declare but returned to the
questioning section to clarify the damage of Vinasun is caused by Grab or not. The Panel
decided to stop the trial until November 22, 2018, to verify, collect and supplement
documents related to the Vinasun damage assessment.

The presiding judge said that after suspending the trial, the Panel issued a written request
to Cuu Long Inspection Company30 to explain Vinasun's damage assessment results.
Specifically, the Court asked the company based on the conclusion that Grab's operations
caused Vinasun's decrease in market capitalization from January 2016 to 2017.

Cuu Long Company considers fluctuations of production and business indicators of
Vinasun in many aspects such as the number of car parking, the number of drivers
leaving, the decline in revenue, profit, brand value, and the enterprise's market
30 The Report is not public, so all relevant information is collected by the author on the news sites.
28

capitalization. But when calculating the actual, direct and tallying damage plan, Cuu Long
Company only uses two types of damage: damage caused by the cost of parking and
parking space and losses from the market capitalization in business.

According to the inspection certificate, Vinasun lost 158.6 billion VND (~ USD 6.84
million), of which the damage caused by Grab was 85.9 billion VND (~ USD 3.7 million).
Although reports by market research companies list many different types of damage, one
thing in common is that Vinasun has actual cost.

These reports also indicate that the cause of Vinasun's losses is due to the penetration of
the transport market of Grab and Uber, of which Grab accounts for 54.2%. The report also
pointed out that it was the rampant, illegal, and promotion of 0 VND trips that led
customers not to use traditional taxis, to switch to Grab.

Vinasun said that the main reason for the decline in profits, leading to a decline in
Vinasun's share price was due to Grab's intrusion. The detailed analysis reports, data,
comparisons over many years, and the recommendations and forecasts in these reports
all coincide with developments in the stock market.

The Court also announced Cuu Long Company's response to this content. According to
the reply, Cuu Long Company relies on analysis reports of securities companies. These
reports show that while the stock score of Ho Chi Minh City is more than 500 points,
Vinasun's share is 21,000 VND / share (~ USD 1). After that, Ho Chi Minh City's stock
score increased by more than 700 points, but Vinasun's shares fell sharply to 14,000 VND
/ share (~ USD 0.6).

These reports also further analyze the reason why Vinasun's profits fell because Vinasun
had to increase the discount to keep the driver asking for leave to work for Grab. The
report also warned that Grab operations are threatening Vinasun's market share.

Vinasun ultimately agreed with Cuu Long's explanation, but Grab still did not agree.
According to Grab representative, Cuu Long Company relies on reports of 3 securities
companies, but the information and data in this report are not accurate. The purpose of
the written report is to serve securities partners and customers. These companies are not
responsible for the accuracy and are provided for information purposes only in this
29

report. At the same time, they warn there may be benefits in it. The Grab side believes
that the assessment of Cuu Long Company is superficial, and does not respond to the
heart of the Court's question to point out the basis that Grab's activities cause damage to
Vinasun.

Grab said that when the lawsuit was initiated, Vinasun issued two inspection reports
based on an inaccurate internet source that was not verified by any agency. After that, the
new Court solicited an assessment at Cuu Long company. However, twice the Cuu Long
company was absent from Court. Grab said that the company did not dare to face its
inaccurate inspection report. And the conclusion that Vinasun's share price dropped in
January 2016 to June 2017 was caused by Grab is unfounded. Meanwhile, for the case of
compensation, the number of damages must be specific.

Explaining Grab's opinion, the chairman announced Cuu Long's document to the Court
and said that when the representative of Cuu Long Company was present at the Court's
summons, Grab would postpone and be absent. Also, at the trial, the Grab side repeatedly
said that Cuu Long's reports and conclusions were inaccurate. According to Cuu Long
Company, the Grab side has made much incorrect information about the news and
inspection results of this company, affecting the image and reputation of Cuu Long
Company. Currently, many customers have asked the company to explain this problem.

Opposing Grab's opinion, Vinasun said that the assessment conclusion is grounded in
having undergone a long process of research and analysis. The above figures are one of
the bases to prove the damage of Vinasun, not the only basis. Grab's damage to Vinasun
has been proven through previous trials: Grab violates the law, there is a causal
relationship between Grab's illegal behaviour and Vinasun's loss.

1. Grab was requested to compensate Vinasun for 4.8 billion VND31

On December 28, 2018, the People's Court of Ho Chi Minh City sentenced the dispute over
contractual damages between the plaintiff Vietnam Anh Duong Company (Vinasun) and
the defendant was Grab Company Limited (Grab). After the deliberation, the Panel said
that in terms of authority this is a commercial business case, Vinasun sued a claim for
31 4.8 billion VND ~ USD 208.000
30

damages outside the contract, the defendant is Grab based abroad, so the jurisdiction of
Ho Chi Minh City People's Court.

According to the Panel, in fact Grab has directly operated, modulated the car, rewarded
the driver's points to recruit drivers, fine the driver. While Project 2432 has no regulations
that allow Grab to sanction drivers. In the testimonies, some cooperatives are partners
with Grab, showing that the co-op does not participate in the workflow between Grab and
the driver, Grab directly shares with the driver, the freight, fee changes are decided by
Grab. If the driver is complained of, it is the responsibility of Grab. The cooperative is not
responsible for the passenger when using the Grab service. According to witnesses, Grab
buys insurance as a demonstration of responsibility to the driver. In addition, when
passengers use Grab services and pay by credit card, the money will be transferred to
Grab account. From there, it shows that providing application software is a method in
Grab's transport process.

The Panel said that Grab said Grab as a company providing technology software was
unreasonable. Grab contracts do not meet the conditions of electronic agreements, so
they are not considered electronic agreements. "Grab's activity is taxi business" - said the
Panel.

Similar to Grab's operational nature, the European Court of Justice also decided that Uber
would operate in transport, not provide application software33. The Panel's
determination of Grab as a taxi activity helps the authorities to build a legal corridor to
create a fair environment.

According to the Panel, Grab violates the law, specifically Decree 8634 and Project 2435.
Under Project 24, Grab is only provided with application software, but Grab is in the
business of taxi transport, causing damage to Vinasun. However, in the losses that

34 Decree 86/2014 / ND-CP, On business and conditions for transportation business by auto in Vietnam.
31

Vinasun brings, it is necessary to consider whether there is a cause and effect relationship
with Grab's violations.

According to the Panel, the Court chooses Cuu Long company as an inspection company
according to the law, the litigants have not agreed to select an assessment unit, so the
Court has chosen the inspection unit as Cuu Long company - the group is sufficient
assessment conditions as provided for by law. The Grab side requested to cancel the
decision to solicit expertise because it believes that this assessment organization is not
qualified and experienced but has not been accepted by the Court. The inspection results
showed that Grab caused 41.2 billion VND (~ USD 1.8 million) in damage to Vinasun. Grab
took 5,000 pages of documents and said that the assessment was not correct, but Grab
could not identify the basis for what the evaluation was not accurate. To validate their
studies, Cuu Long has invited Quoc Viet company to participate, but in all these processes,
people from Cuu Long Company join. Therefore, Quoc Viet's support for Cuu Long does
not violate the provisions of legal expertise.

Considering the cause and effect relationship, according to the Court from January 2016
to June 2017, according to the documents in the file, the growth rate of the passenger
transport industry, the revenue of licensed taxis increased. However, Vinasun's licensed
taxi sales decreased due to the presence of Grab. Meanwhile, the number of registered
vehicle badges for Grab has significantly increased (by the second quarter of 2017 more
than 23,000 vehicles). The increase in the number of Grab cars corresponds to the
decrease in the figure of Vinasun vehicles. Since then, the Court believes that there is a
dialectic relationship between Grab's law violation and Vinasun's damage.

Regarding the damage caused by the decrease in Vinasun's market capitalization, the
Panel believes that this damage cannot be separated. Therefore, although the damage
caused by a decline in market capitalization can be determined, it cannot be determined
which part of the damage caused by Grab, partly due to other factors, this part is not
accepted by the Panel. Since then, the Panel only agreed with a part of Vinasun's request,
forcing Grab to compensate outside the contract for the amount of 4.8 billion VND (~ USD
208.000). At the same time, to propose to the competent authority some management
issues.

32

2. Grab disagree compensate Vinasun

On January 12, 2019, the People's Court of Ho Chi Minh City said that Grab Vietnam Co.,
Ltd. has just applied to the Ho Chi Minh City People's Court to appeal the entire judgment
of compensation for the Vietnam Anh Duong Joint Stock Company - VinaSun 4.8 billion
VND (~ USD 208.000).

In the appeal, Grab asked the appellate Court to consider cancelling the entire first-
instance judgment and suspending the resolution of the case, because the Ho Chi Minh
City People's Court violated the severe proceedings. This agency has no authority to hear
the case; giving a judgment beyond the scope of filing a claim; do not summon witnesses
to hearings at their request.

The Grab side confirmed that there was no violation with Vinasun. If the appellate Court
does not suspend, it must correct the first instance judgment, determine that Grab is not
in the transport business, does not violate the law and reject all of VinaSun's requests.
The plaintiff also cannot prove the damage, the causal relationship between Grab's
behaviour and the loss (if any) of Vinasun.

Grab said that the Ho Chi Minh City People's Court did not thoroughly and objectively
evaluate the details and evidence of the case. The Court judged that Grab was in the
transport business but ignored the opinion of the Ministry of Transport that "only
provides technology services", which is supportive to the transport unit based on the
business cooperation agreement. Ho Chi Minh City People's Court rejected Grab's request
for re-assessment to rely on the inaccurate and non-objective assessment of the
assessment company appointed by the Court; The Court imposes regulations on the
transport business for Grab. "It is illegal for the Court to determine Vinasun's damage
according to the cost of parking and reduce the market capitalization. In fact, the damage
of Vinasun is caused by many other reasons," the appeal stated.36

3. Vinasun asked Grab to pay additional compensation of 36 billion VND37

36 The Appeal is not public, so all relevant information is collected by the author on the news sites.
37 36 billion VND ~ USD 1.5 million
33

The Vinasun side upheld the appeal, asking Grab to pay an additional 36 billion VND (~
USD 1.5 million), while the Grab side said that the first instance verdict violated the
proceedings seriously.

On March 10, 2020, the High People's Court in Ho Chi Minh City opened an appellate trial
for the dispute over non-contractual damages between the plaintiff Vietnam Anh Duong
Company (Vinasun) and the defendant is Grab Co., Ltd. (Grab). Unlike the first instance
trial where many Vinasun drivers came to the Court, the appellate litigation only had
those summoned and involved in Court.

At the trial on March 10, 2020, the plaintiff kept the appeal, asking the Panel to accept the
entire Vinasun petition, forcing Grab to compensate more than 41 billion VND (~ USD 1.8
million) due to the decrease in capitalization on the market. The first instance forced Grab
to compensate the plaintiff 4.8 billion VND (~ USD 208.000), so Vinasun asked Grab to
offset an additional amount of 36 billion VND (~ USD 1.5 million). The plaintiff said that
based on the assessment results of Cuu Long Company, Vinasun had real damage due to
Grab's wrongdoings. The decrease in Vinasun's market capitalization corresponds to the
number of Grab cars.

The defendant presented five reasons, including:
- This case does not fall under the jurisdiction of the Court;
- During the first-instance trial, there are severe procedural violations;
- Violations in the application of the law;
- Incorrect damage determination; and
- The Court of First Instance is not competent to recommend.

Accordingly, the Grab side said that this case was under the jurisdiction of the Ministry of
Transport, in the process of resolving the case, the defendant had many petitions to
suspend the case but the first instance did not agree. The Court of First Instance did not
summon representatives of the Ministry of Transport, summon Cuu Long Company, the
witness was a violation of the proceedings. The first instance determines and misapplies
the law with reality. Grab thinks that Grab's operating framework is a pilot, so the first
instance believes that Grab violates Decree 86. In addition, Grab said that the first
instance judgment determined the damage was incorrect, the appraisal process had many
violations, not following the law.
34

In December 2018, at first instance, the Ho Chi Minh City People's Court forced Grab
Vietnam to compensate Vinasun more than 4.8 billion VND (~ USD 208.000). According
to the Trial Panel of First Instance, Grab made many mistakes in the course of doing
business in Vietnam and there is a causal relationship between Grab's error and
Vinasun's damage. However, this unit is not the only cause of Vinasun's losses.

The verdict determines that Grab is only a technology provider, not doing the taxi
transport business and that the cooperative manages drivers. But in fact, Grab operates
the driver, sets the fare. Customers who book a car will transfer via Grab or pay the driver
with a discount. The reward and penalty for driving are decided by Grab - contrary to
Project 2438.

Grab's business is not in compliance with the regulations. By law, the car transport
business must ensure the quantity and quality, the service staff, the labour contract, the
crew must be trained in traffic safety, do not use the driver during the period of parking
is prohibited, suitable for the size of the enterprise; enterprises must pay insurance for
their employees. However, Grab does not comply with this regulation and does not pay
taxes. Grab also violates the law on promotion, increase or decrease rates many times a
day. Since then, the Panel believes that there are grounds to show that Grab's mistakes
cause damage to Vinasun. However, it is necessary to consider the whole cause and effect
relationship.

According to the Court, since Grab entered Vietnam there have been many activities
affecting Vinasun's damage. But the plaintiff did not specify which part of the damage
caused by Grab. Therefore, the Court does not accept all requests of Vinasun, only agrees
with the loss of more than 4.8 billion VND (~ USD 208.000) due to the parking lot.

The question is "What is the reason why Vinasun still persists in suing Grab for a 36
billion VND compensation?"

35

A bad business year of Vinasun continued to take place in 2018 when revenue decreased
by 29% and profit evaporated 53% compared to 2017. Explaining the reason, Vinasun
only gave one goal: "Unequal competition from foreign taxi companies." Vinasun has
announced the consolidated financial statements that were audited for 2018, showing
that the business targets of the business last year have decreased dramatically.39

Specifically, the taxi company's total revenue in 2018 reached 2,073 billion VND (~ USD
89 million), a decrease of more than 29% compared to 2017.

In which, the revenue from providing passenger transport services by taxi brought 889.8
billion VND (~ USD 38 million) to Vinasun, down sharply to only 43% compared to 2017.
Revenue from franchises and taxi operation increased 55% to 877.7 (~ USD 37 million)
billion VND.

After deducting all kinds of expenses, profit from business activities of Vinasun is only 10
billion VND (~ USD 430,000), equal to 27.6% of the results achieved in the previous year.

The other source of income accounts for a large proportion with 105.2 billion VND (~
USD 45.3 million) but has halved compared to the previous year, partly due to the decline
in income from liquidation of fixed assets. In 2018, Vinasun earned 48.5 billion VND (~
USD 2 million) in revenue from the settlement of fixed assets, down 71% compared to
2017.

Given these enormous economic losses, Vinasun has no reason to give up in the fight with
Grab. Although the court ruling asked Grab to pay 4.8 billion VND compensation to
Vinasun, both sides were not satisfied with this decision.

IV. Grab officially compensates Vinasun

On March 10, 2020, the High People's Court in Ho Chi Minh City opened an appellate trial
for the dispute over non-contractual damages between the plaintiff Vietnam Anh Duong
Company (Vinasun) and the defendant is Grab Co., Ltd. (Grab).

36

The trial was opened according to the appeal of the plaintiff, the defendant as well as the
protest of the People's Procuracy of Ho Chi Minh City and new protest of the High People's
Procuracy in Ho Chi Minh City.

During the argument, the plaintiff gave a series of evidence that Grab did the taxi
transport business, and that Grab's illegal behaviour caused damage to Vinasun. From
there, ask the Panel to approve the plaintiff's petition. In response to Vinasun's point of
view, Grab pointed out several first-instance procedural violations. In addition, Grab
believes that the expertise of Cuu Long Company has many errors, Grab does not have
illegal acts, so it is not obliged to compensate the plaintiff. So, Grab requested the Panel
to cancel the entire first instance judgment, return the file to the first instance for re-trial.

The representative of the High Procuracy in Ho Chi Minh City said that the first instance
had followed the due process. Grab is a legal business unit, if Vinasun's revenue and profit
decline, there are many different reasons. The first instance verdict that Grab has
unlawful acts causing damage to Vinasun, and it is illegal to force Grab to compensate
Vinasun. The first instance judgment still has many shortcomings that have not
adequately assessed the nature of the case. Grab's existence is in line with the current
development trend of the country and the long run. Since then, the Procuracy asked the
Panel to accept all the protests of the Institute of People's Protection of Ho Chi Minh City,
further demonstrations of the High People's Procuracy in Ho Chi Minh City, and at the
same time reject all the plaintiff's appeal.

After deliberation, the Panel judged that the jurisdiction of this case kept the plaintiff and
the defendant did not sign the contract, so the case of the non-contractual dispute falls
under the jurisdiction of the Economic Court of the Ho Chi Minh City People's Court, so
refute the appeal of Grab's authority.

The defendant said that the defendant did not harm the fare, the operation of the vehicle
management and the driver. However, the defendant did the transport business by taxi,
because the defendant performed the activities of a transport business unit such as
storing, managing driver's profile information, receiving the request of customers,
provide 2-way information to drivers and customers, manoeuvre vehicles, decide vehicle
itineraries, rates, implement promotions. They were thereby proving that the defendant
used the software, knowing that partners using their software must depend on their
37

management. Specifically, the defendant divided the proportion of the profit in a certain
percentage with the driver, receiving customer feedback to decide to reward the driver.
The above methods show that it is the operation of a transport unit but managed
according to the legal framework for e-commerce activities. The defendant's business
approach is not to provide connections for passengers and drivers under Project 2440, but
to operate in taxi transport. But the taxi transport business must comply with Decree
8641.

The Court of Appeals judged that in the 4.0 era, the defendant had provided a new type
of business, sharing economy, taking advantage of idle cars, workers have more income,
consumers have more choices. The benefits the defendant brings is undeniable. However,
this model is causing many consequences for transportation businesses in particular, and
traditional taxi businesses in general because the defendant does not have to pay taxes
like the transport companies, not subject to business conditions such as taxis, not to
attach logos.

The Panel believes that there is a causal relationship between the defendant's illegal
behaviour and the plaintiff's damage. The Court of First Instance held that the damages
caused by the plaintiff's decline in market capitalization could not be separated from the
part of the damage caused by the defendant. So not accepting the 36 billion VND (~ USD
1.5 million) damages claim is unfounded. Besides, the plaintiff could not produce other
evidence to prove his request, so the Panel did not accept the plaintiff's appeal request.

From the above comments, the Panel decided to reject all the appeals of the plaintiff, the
defendant, dismiss the request of the 2-level Procuracy, and declare the first instance of
medical judgment. According to the regulations, the official appellate judgment takes
effect after the Court sentenced, which means that Grab officially has to compensate
Vinasun for 4.8 billion (~ USD 208.000). Closing the lawsuit lasted more than 18 months.

Chapter III: Influence of the case on Vietnam's market and legal corridor.

41 Decree 86/2014 / ND-CP, On business and conditions for transportation business by auto in Vietnam.
38

I. The assessment of insiders and outsiders with the lawsuit between
Viansun and Grab

1. A legal perspective on Grab's business model

According to lawyers in Vietnam, Grab's decision on freight rates is one of the bases that
show Grab is participating in the field of a transport business. If Grab operates as a pure
transport exchange like an e-commerce platform, does not engage in price adjustments
or promotions, Grab is simply a technology company.

In addition to pricing decisions, Grab also launched a 0% promotion without needing to
notify the Ministry of Industry and Trade, which enabled the company to gain market
share very quickly. Meanwhile, other transport businesses such as Vinasun, if they want
to implement promotions, must notify the Ministry of Industry and Trade in advance, and
are not allowed to offer 0% promotion, causing the unfair competition with other
businesses. However, to determine how much damage Grab caused to Vinasun and how
much damage, the lawyer said this is a difficult problem, and can only be solved when
Vinasun provides convincing evidence about their causality and the value of their losses.

As a technology company, Grab enjoys more favourable conditions than traditional taxis,
typically the different tax policy between conventional cabs and Grab, which many
consider being inequality. The Grab model, yes, is involved in pricing decisions, but
doesn't own any car and currently operates as an ecosystem that provides services from
travel to deliver goods or food delivery.

The Ministry of Transport did not know whether to identify Grab as a trucking business
in order not to lose track of the current law, or find a new concept for a controversial type
of business. Putting Grab in the same category as traditional taxis for these reasons makes
many people wonder.

Industrial Revolution 4.0 has appeared since the 2010s, and developed countries have
done, are doing and continue to do. The big technology companies in the world are
changing lives every second, every minute. Vietnam is not out of the trend either. While
the outside world is bustling with business models based on Big Data, AI, Deep Learning
technologies, in Vietnam, we are still struggling with the test of "technology taxi".
39

With the outstanding advantages from business models such as Grab, traditional taxi
companies face specific difficulties due to the difference between management policies.
They sent letters asking for help everywhere, propagating information about Grab,
posting slogan banners on the car, litigation for compensation for the reason of losing
market share, and asking the Government to stop the Project42.

Some people think that the 4.0 revolution concept should not be borrowed to justify a
business model of a transport business like Grab. Others are not concerned with the 4.0
revolution or the loss of competition among enterprises. What they care about is the
ultimate consumer benefit. They support services which are convenient, good quality,
and affordable.

2. Winning Grab lawsuit means a lot to Vinasun?

On March 10, 2020, the High People's Court in Ho Chi Minh City sentenced Grab Vietnam
Co., Ltd. to cause damage to Vinasun taxi, forcing to compensate for the loss of 4.8 billion
VND (~ USD 208,000). Mr. Ta Long Hy - Member of the Board of Directors, Deputy General
Director of Vietnam Sunshine Joint Stock Company (Vinasun) shared with the media
about this victory of Vinasun.

According to Mr. Long, although the Court of First Instance and Appeal did not approve
Grab's request to pay Vinassun 42 billion VND (~ USD 1.8 million), the Court ordered
Grab to pay 4.8 billion VND (~ USD 208,000). A rare thing, of great significance, after all,
from Vinasun's side, the ultimate goal is not to sue for money, so it doesn't matter how
much money it is, but it affirms that Grab's activities in Vietnam over the past time are
illegal. He said that the view of Vinasun that wants Grab to enter Vietnam must respect
the rules of Vietnam. Business must compete healthily, should not use the material to
make "tricks".


40

The Deputy General Director said that basically, the business is still operating, but it
cannot be said that it is useful when the Covid-19 epidemic is complicated around the
world. Moreover, before that, Vinasun was unfairly competed by Grab, which led to the
sluggish operation of the company, many employees leaving and the small number of
customers. But after winning the lawsuit with Grab, Mr. Long said that Vinasun would be
more stable and more confident to continue to become a good business, regain its
previous form.

It is known that during the case, many Vinasun taxi drivers were always present at each
trial, carrying banners, expressing their frustrations with Grab. It can be seen that these
traditional taxi drivers, although they may not fully understand the nature of the incident,
are partly expressing their frustration when the technology taxi company threatens their
opportunities to work for a living.

3. Customers benefit from the lawsuit between Vinasun and Grab

There are still many mixed opinions surrounding this lawsuit. According to many
economists, this is a positive sign for a healthy and legal competitive market.

If Grab wins the lawsuit, this is the event that traditional taxi companies have to adjust,
reduce rates and increase service quality to attract customers to their side. At the same
time, it will also create conditions for many technology taxis companies to be born,
bringing benefits to customers thanks to the competition of many parties.

Vinasun wins the lawsuit, technology taxi firms like Grab are forced to adjust their
behaviour to the right functions, duties and powers to create a healthy, severe, legal,
competitive environment. "Shuffling the concept". At the same time, this result can also
eliminate the risk of technology car manufacturers temporarily reducing prices to
skyrocket prices when it eliminates most of the traditional taxi competitors.

II. Remove difficulties for enterprises

1. Vinasun sued Grab - an unprecedented story

41

The lawsuit between Vinasun and Grab is considered unprecedented when a traditional
taxi company sues a technology taxi company and claims damages. From a legal
perspective, Vinasun has the right to sue Grab. However, this does not mean that the court
result will force Grab to pay compensation. There are two streams of derivative views:

- First, Grab is primarily a transport service business, Grab's software is just a
connection system instead of a traditional switchboard; the profit does not come from
software production and supply.
- Second, Grab is just a platform that connects passengers and drivers with idle cars,
without generating pure labour or owning any car.

In principle, even when proving that Grab has violated acts, the core factor must be the
basis that demonstrates that such behaviour causes direct damage to Vinasun and
generates the number of 41.2 billion VND (~ USD 1.8 million)? Therefore, for a case of an
unprecedented form, it is understandable to suspend the trial multiple times especially
when many contradictory views and valid grounds for Grab's violation are unclear and
convincing.

A pleasant business environment for startups requires a clear and up-to-date legal
framework. That also means that startups need to understand very well the laws that are
specific to their operations for each market, not that every innovation will be a priority.
However, if Grab is forced to compensate with unconvincing grounds, this will more or
less create a sense of fear in the parallel economy between the traditional model and the
modern one, especially when there is many similar Grab models are operating in Vietnam.

Usually, new business models are developed in international markets before being
operated in Vietnam. If the policy framework is not safe enough, large firms will always
invest in safe, half-and-half or give up risky markets. Therefore, Vietnam needs to learn
flexible management practices from other countries.

2. Improving the Vietnamese legal system after the lawsuit

The fact has proven that, because Vietnam has not applied automatic transport
management software, the functional forces cannot check, monitor and handle violations;
At the same time, transport enterprises and drivers also do not voluntarily obey the law.
42

There is even a negative situation, protection for violations, illegal activities to gain illicit
profits, causing traffic unsafety.

On the other hand, transport management by technology is a prerequisite for removing a
lot of transport business procedures and conditions, keeping up with and keeping pace
with the industrial revolution 4.0, at the same time, ensuring compliance and
synchronous with the management of other industries such as tax, e-commerce. At the
same time, the standard regulations on compulsory information data as well as data
transmission with state management agencies are aimed at combating the situation that
the vehicle is operating illegally, violating the traffic laws, causing insecurity traffic and
tax evasion. Currently, taxi companies in Vietnam are applying technology 4.0 software
produced in Vietnam by themselves with very advanced and preeminent features. But
due to the lack of favourable business conditions such as Grab, the software of the taxi
business has not been capable.

Currently, traditional taxis have a service period of 8 years in big cities such as Hanoi and
Ho Chi Minh City. Before going on business, vehicles must be checked for safety
conditions and inspected once every 6 months. There must be parking space suitable for
the business plan, banned from traffic on some routes, the quantity is limited by
transportation planning. Drivers must learn their skills, business culture, train,
supplement the steering wheel, have a certificate of professional training, must wear
uniforms and name tags. The working time of the driver is 8 hours/day, if the driver does
not run continuously for more than 4 hours when violating the regulations on business
conditions, in addition to the punishment for the driver, the enterprise will also be
sanctioned. At the same time, the service quality must be registered with specialized
management agencies. The meter must be inspected once a year at a fixed price, and
permission must be applied to change it. Besides, it is required to have a traffic safety
management and monitoring department. Traditional taxis are also subject to a 10%
VAT.43

43 Legal basis: The 2008 Law on Road Traffic;
Decree 86/2014 / ND-CP, On business and conditions for transportation business by auto in Vietnam;
Circular No. 63/2014 / TT-BGTVT regulating the organization and management of car transport activities
and road transport support services.
43

Meanwhile, technology taxis are only bound by an inspection cycle of 1-2 years.
Technology taxis have a shelf life of up to 20 years. Cash register application without an
inspection, freely increase or decrease rates. Due to such unequal conditions, in recent
years, taxi businesses and associations nationwide have had many petitions to ministries
and agencies to consider the right type of business such as Grab to make management
policies right to reality. It is necessary to determine the right type and management
measures for taxis, avoid swapping concepts, deliberately misrepresent the wrong type,
causing inequality for the benefit of the group.

The settlement of the above severe unreasonable issues is essential, to restore order and
discipline and civilization in the road transport sector in Vietnam.

3. The introduction of Decree 10/2020 / ND-CP, regulating business and business
conditions by auto transport

From April 1, 2020, in Vietnam, transport business units and means of transport business
are participating in the Plan of piloting application of science and technology to support
management and operation connection. Contracted passenger transport (according to
Decision 24 / QD-BGTVT44 dated January 7, 2016) will have to stop pilot operations.

Decree No. 10/2020/ND-CP was issued by the new provisions of the law, meeting
practical requirements, promoting the achieved results and overcoming the limitations
and shortcomings to Create a formal legal framework for the application of connection
software in the transport business. In particular, Decree 10 demonstrates the
determination of the Government of Vietnam to vigorously promote the use of science
and technology in the state management of car transport business, cutting down on
players administrative practices and business conditions are no longer appropriate.

According to Article 35 of Decree 10/2020/ND-CP, the unit providing the transport
connection application software is only offered with the software, not directly operating

44

the vehicle or driver; do not decide the freight charge. Thus, providers of transport
software such as Grab will not be able to determine the price directly.

If units want to decide the price, they will have to connect to the software of the transport
business/cooperative where the driver is registered for the business/cooperative to
determine the software price. Or, the software suppliers themselves must register the
transport business by car.

Assessing the role of the issuance of Decree No. 10/2020 for transport business, many
experts say that this new Decree has clearly stated the concepts of business and logistics
business conditions load by car. At the same time, this Decree has also resolved the
fundamental limitations and problems of the previous Decree 86.

Firstly, Decree 10 clearly defines the concept of a transport business. These are the units
that operate vehicles at the same time as drivers. Besides, this enterprise has the right to
decide on the freight rate. These are the transport business units. It means that, for the
traditional transport business units like a long time ago, there is a basis for identifying
who is responsible for maintaining these transport business conditions and operations
(legal entities). These are original contents that have been specified in the new Decree to
ensure efficient and fair procedure.

Decree 10 provides more specific, clearer and detailed provisions for the transport
business conditions of the type of passenger transport under the contract (contract car).
It is a fundamental change compared to before. Because the previous regulations on
passenger transport business were straightforward and lax about the transport business,
this has caused controversy, the strong reaction between the business of transporting
passengers under contracts and the business of carrying passengers on fixed routes.

The next new point is that this Decree specifies more clearly and accurately that the
transport business must promote the use of information technology in management; in
information exchange between state management agencies such as the Ministry of
Transport and the Ministry of Finance or between the Ministry of Transport and the
Ministry of Public Security. The purpose is to manage traffic safety and order better and
handle violations more thoroughly than before.

45

It is especially important to be resolved when this Decree is implemented in life, that is
the factor that the state management of tax will be stricter. Tax obligations of businesses
will be managed, operated and created fairness among the types of transport business in
the market, especially in the current fierce competition context.

4. Lessons for technology taxi companies after the lawsuit between Grab -
Vinasun and the introduction of the Decree 10/2020 / ND-CP

In the past, traditional taxi could be easily distinguished by crests and technology taxis
could not. It is a very controversial story in Vietnam over the past time. Starting from
April 1, 2020, when Decree 10 officially takes effect, both traditional taxis and contract
cars must have identification signs thanks to the reflective logo or the crest according to
the regulations. And car companies like Grab have to choose their own business, either
as an intermediary providing software or as a transport business.

From April 1, just performing at least one of the main stages of transport activities such
as: directly operating the vehicle, driving a car or deciding the freight rate, it will be
considered participating in the transportation business. According to experts, the new
Decree will create a level playing field for all businesses. Besides, it also shows
consistency in the application of technology to develop the digital economy, including
transport management. It can be seen that this is an open regulation for units to select
and define their business activities to suit the new requirements and conditions. If
choosing to be a provider of transport connection software, businesses will have to
comply with the law on electronic transactions and other relevant laws and meet the
requirements of the Decree 10/2020 / ND-CP. With the other option, businesses will have
to register for the transport business and operate under the provisions of the transport
business conditions and take legal responsibility as a transport business unit.

Technology taxi companies coming to Vietnam after Grab like Be45 or FastGo46 will have
a more transparent regulatory framework thanks to the introduction of the Decree.
45 BE GROUP Joint Stock Company, a Vietnamese technology startup, started in the field of Technology
Transport. The two main services that the BeBike app provides are beBike (2-wheel booking service) and
beCar (4-wheel booking service).
46 FastGo is a completely new application built and developed by MPOS Technology Joint Stock Company, a
subsidiary of Nexttech technology group, which is a group of the top 50 leading information technology
enterprises in Vietnam 2007.
46

Instead of having to apply for pilot permits in several big cities, these firms will define
their business purposes in Vietnam to have proper business registration, to avoid unfair
competition or controversy happened as in the case of Grab and Vinasun.

III. Era 4.0 and legal problems posed on the Vietnamese market

Over the past two decades, the general trend of global businesses has been to organize
and define themselves as "platform". Under that definition, the companies in question use
digital and other emerging technologies to create value by facilitating connections
between two or more groups of users.47

Grab is one of the emerging technology companies in Vietnam, opening up a whole new
business trend, the beginning of a series of market access by other companies such as Be,
FastGo or GoJek. Not merely a company providing smart ride-hailing software, Grab has
relied on unresolved loopholes of Vietnam's law to operate as a regular transport
company. This had caused the unfortunate legal consequences that this company suffered
when a traditional Vietnamese taxi company, Vinasun, filed a lawsuit on the grounds of
violating Decision 24 of the Ministry of Transport on the pilot implementation of science
- technology application.

It can be seen those platform companies in Vietnam, or even in many other countries, use
not only new technologies to trade, exchange information or to connect people but also
facilitates multi-stakeholder collaboration aimed at delivering continual innovation in
the platform's functionality and related products and services. These various
stakeholders include but are not limited to, managers, employees and investors, but also
(and crucially) consumers, developers, content creators, and other companies. (both
large and small), nonprofits, educational institutions, government.48

Faced with such rapid developments, Vietnam currently has no specific legal regulations
or positive changes in building the legal framework for business forms of platform
companies in Vietnam. Besides controversial and flawed guiding documents, decrees and
47 Erik Vermeulen, Mark Fenwick, Marcelo Corrales, and Helena Haapio (2019). “Platform-Driven Legaltech
& the New World of Legal Design.” Journal of Internet Law 22, no. 10: 3–13.
48 Erik Vermeulen, Mark Fenwick, and Wulf Kaal (2019). “Why Blockchain Will Disrupt Corporate
Organizations: What Can Be Learned from the ‘Digital Transformation.’” The Journal of the British
Blockchain Association 2.
47

circulars leading to law-breaking actions like Grab, Vietnam need to change in building a
standard legal system to catching up with and adjusting the operations of the foundation
companies with new business forms.

The fact that the regulations for taxi transport has always been an issue which has caused
a lot of controversy among lawmakers, especially after the emergence of many new
businesses such as Uber or Grab49. As mentioned in the Elite Taxi and Uber Systems Spain
lawsuit, if the law enforcement agencies do not have a consensus on regulation and
management, businesses will always feel that technology competitors are preferred due
to its newness and convenience, thereby leading to unnecessary competition or
confusion.

With the vigorous development of a series of platforms, Vietnam needs to quickly
integrate and learn from more advanced countries in the law provisions for this new
business form. First of all, the change in management, instead of discrete document
systems and many gaps in regulations, Vietnam should consider setting up Blockchain50
for transport business management. Simply, “Blockchain is a shared and distributed
digital "ledger" or "database" that maintains a continuously evolving list of "blocks". A
block can contain records of transactions related to a digital asset but can also include
"events" or other information. After the record is verified and validated, a block is added
to the chain with the previous records in linear and chronological order.”

With the management in the form of Blockchain, businesses will have a clearer and more
transparent system of regulations than through loopholes of legal documents to do
business. Moreover, state managers will also have a broader view of the overall business
registration in the form of taxi transport or intermediary software, to solve the problem
can be acquired quickly, effectively, and avoid a prolonged period such as the Vinasun
and Grab lawsuits.

It can be said that the lawsuit between Vinasun and Grab has set a new precedent, forcing
Vietnamese lawmakers to re-examine the way of managing and adjusting the legal system
49 Cetin, Tamer, and Elizabeth Deakin. 2019. “Regulation of Taxis and the Rise of Ridesharing.” Transport
Policy 76.
50 “What Is Blockchain?” (2017), Journal of Accountancy, vol. 224, no. 1, pp. 29–29.
48

more closely and effectively, to be able to welcome businesses with new trends in the
current technology boom.

49

CONCLUSION

After more than 18 months, the lawsuit between Vinasun and Grab officially ended with
a fine of 4.8 billion VND (~ USD 208,000) which was fined by the Ho Chi Minh City
People's Court. The lawsuit has brought up a more exciting topic than ever, not only about
business issues and competition among businesses in the 4.0 era, but also a premise for
law enforcement in Vietnam to pay more attention to the legal framework for technology
companies like Grab is operating in Vietnam.

The penalty has been set, Grab cannot operate under the old method because there are
too many loopholes after the lawsuit is identified with Project 2451. If it is not Grab, sooner
or later in the Vietnamese market, when technology companies combined transport
development, similar lawsuits between Vinasun and Grab is only a matter of time., similar
trials between Vinasun and Grab are only a matter of time. Because the state strictly
regulates traditional taxis, they will feel constrained and squeezed while technology
transports are loosening the same rules.

Decree 10/2020 was born as a "new door", introducing stricter regulations on business
and management for the technology taxi model. However, there are conflicting opinions
that Vietnam is making it difficult for itself in the 4.0 integration period? Why be strict
with potential audiences that are recognized around the world? This debate will certainly
not end. However, from a personal perspective, I think that for a developing country like
Vietnam, gradually approaching new trends, bringing progressively traditional models
combined with modern is a safe step. Vietnam has a lot of potential in the future and
cannot deny the efforts of the state apparatus in this upward process.

50

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Master

I would like to acknowledge everyone who played a role in my Master Thesis.

Indonesia. Anthropology of Work Review.

7 Vinasun Financial statements of 2016 from

9 Vinasun Financial statements of 2019 from

12 Vinasun Financial statements of 2016

13 Vinasun Financial statements of 2017

of the Vietnam Competition Law

Profesional Elite Taxi v Uber Systems Spain, SL.

Uber Systems Spain, SL.

24 Decree 52/2013 / ND-CP, Decree On E-Commerce.

Uber Systems Spain, SL.

31 4.8 billion VND ~ USD 208.000

Uber Systems Spain, SL.

37 36 billion VND ~ USD 1.5 million

39 Vinasun Financial statements of 2018

43 Legal basis: The 2008 Law on Road Traffic;

mobile taxi booking apps”, from https://www.techinasia.com/grabtaxi-enters-

Company Development and Valuation in Indonesia," 2020 IEEE 7th International

implementation of science - technology application, Support for management and

Profesional Elite Taxi v Uber Systems Spain, SL.

12. Vietnam Commercial Law

13. Vietnam Competition Law

14. Decree 52/2013 / ND-CP, Decree On E-Commerce.

15. GrabCar’s service price list from https://www.grab.com/vn/transport/car/ (In

to change management thinking to suit new business models”, from

the judge’s decision”, from https://learn.asialawnetwork.com/2019/04/08/vietnam-

firm Vinasun in lawsuit", from https://e27.co/grab-ordered-to-pay-us208k-

Continues", from https://blogs.loc.gov/law/2018/03/uber-at-the-ecj-the-legal-

transport firm”, from

Corporate Organizations: What Can Be Learned from the ‘Digital

Ridesharing.” Transport Policy 76.

taxi drivers in Bandung, Indonesia. Anthropology of Work Review.

“Transaction Engineer”: Digital Technologies and Disruption of the Legal

the exponential growth of disruptive technology. Web publication/site,

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