HCM City (VNS/VNA) - Changes in itsbusiness model and operation helped taxi firm Vinasun avoid bankruptcy lastyear.

According to the firm’s chairman Dang PhuocThanh, they have also boosted performance in the first three months of thisyear.

2018 was a tough year for Vinasun (HoSE:VNS) and other Vietnamese taxi firms as their market shares were narrowed dueto the strong growth of the ride-hailing company Grab.

Last year, Vinasun’s total revenue dropped29 percent to 2.07 trillion VND (89 million USD) and its post-tax profit halvedto 89 billion VND (3.85 million USD).

Thanh said at the firm’s recent annualshareholder meeting that since the appearance of Grab in Vietnam in early 2014,the Singaporean ride-hailing business has grown strongly and taken over thepassenger transportation market.

Meanwhile, the legal framework hasremained underdeveloped and is not matching the growth of the market as well ascustomer demand, Thanh said.

“Operation conditions for taxi firms andride-hailing businesses must be equal and regulations over the service must bestrict enough to make sure passenger’s safety comes first,” he said.

In late December 2018, Vinasun won a courtwith Grab when the Vietnamese firm alleged Grab as the sole factor for itsearnings decline.

Vinasun demanded Grab to compensate 41.2billion VND (1.78 million USD). However, the court ordered Grab to pay only 4.8billion VND (207,000 USD).

The court decision shows there’s stillinequality in the way Vietnamese companies are treated against foreign firms,according to Thanh.

To improve its competitiveness in thetransportation industry, Vinasun has developed its own booking application andlearn new things to perform better.

Individual income for drivers is anotherimportant issue for local taxi firms. Thanh said the company wants to secureits driving staff so it allows drivers to franchise the cars and supports partsof financial expenses for drivers in advance.

In the first quarter of 2019, Vinasunrecorded an annual increase of 7.2 percent revenue, which reached 534 billionVND (23.09 million USD). Of the figure, taxi drivers contributed 463 billionVND (20.02 million USD), up 12 percent year on year.

Its post-tax profit almost tripled to 32billion VND (1.38 million USD) from 11.6 billion (500,000 USD) in the firstquarter of 2018.

In 2019, Vinasun eyes 3.2 percent and 11.8percent increases in total revenue and post-tax profit. The figures areprojected at 2.14 trillion VND (92.5 million USD) and 99.6 billion VND,respectively (4.3 million USD).-VNS/VNA