Competing ride-hailing services accelerate towards eco-friendly transportation leadership
Electrifying Vietnam's Ride-Hailing Market: A Push Towards Sustainable Urban Mobility
In a significant stride towards reducing urban emissions and addressing environmental concerns, ride-hailing companies in Vietnam, particularly in Ho Chi Minh City, are embracing electric vehicles (EVs). This transition is part of large-scale EV initiatives aimed at significantly reducing urban transport emissions.
Promotions and Incentives
Grab and BYD Vietnam have launched a promotional program to encourage ride-hailing drivers to switch to EVs. The program offers incentives such as a guaranteed income of up to $1,000 per month for GrabCar Plus drivers. BYD's electric MPV, the M6, with an estimated on-road price of around $30,000, is being recommended for Grab drivers as part of the promotion.
Ho Chi Minh City's EV Goals
Ho Chi Minh City aims to convert 400,000 ride-hailing gasoline motorcycles to EVs by the end of 2029. Interim milestones include a 30% conversion by 2026 (120,000 vehicles), 80% by 2027 (320,000 vehicles), and full conversion by 2029. This transition is projected to notably reduce vehicular emissions, as ride-hailing vehicles cover much greater daily distances than average citizens, amplifying the environmental benefits.
Supporting Infrastructure
The city is investing in supporting infrastructure, planning to build 19 major EV charging stations and 3,000 battery-swap points by 2027. This infrastructure expansion will serve thousands of electric buses and ride-hailing vehicles, with a budget of approximately US$15.7 million.
Collaboration and Partnerships
Public and private stakeholders, including transport companies and EV manufacturers like VinFast, are involved in ramping up the urban EV ecosystem. VinFast operates hundreds of charging points for electric motorbikes, indicating collaboration with ride-hailing firms.
Regional Context
The trend towards electrification in ride-hailing fleets is not limited to Vietnam. Across Southeast Asia, ride-hailing platforms have been actively adopting EVs. For instance, Vingroup launched an electric taxi service in Indonesia in late 2024, leveraging its advantage as an EV manufacturer to expand its presence in Southeast Asia. GoJek is focusing on converting its entire two-wheeler fleet to electric motorcycles by 2030 and has established a joint venture to manufacture them.
Environmental Impact
Transitioning one petrol-powered ride-hailing vehicle to electric has a significantly higher environmental impact compared to regular private users. Electricity costs around 80% less per kilometre than petrol, and EVs require less maintenance, potentially saving ride-hail drivers $40-50 per month.
Policy and Regulation
The HIDS proposal suggests rolling out a conversion plan from 2026, with attractive incentives to encourage drivers to shift to EVs and a complete phase-out of gasoline-powered two-wheelers on ride-hailing platforms within five years. Starting July 2026, Hanoi will ban fossil-fuelled motorbikes within its inner Ring Road 1, with the ban expected to gradually expand to other ring roads.
Market Dynamics
The EV segment is set to lead the expansion of the Vietnamese ride-hailing market, with a compound annual growth rate of around 45% between 2024 and 2029. GSM is currently leading both the traditional taxi and app-based ride-hailing segments in Vietnam, commanding a 40% market share and generating an estimated $400 million in revenue. Xanh SM and Be Group, other major players in Vietnam's ride-hailing market, are also accelerating their green transition strategies.
In summary, the electrification of ride-hailing fleets in Vietnam is a significant step towards sustainable urban mobility. The initiative focuses on eliminating air pollution and greenhouse gas emissions from ride-hailing transport activities, aligning with broader governmental policies in Vietnam, such as the mandate for 100% electric or clean-energy taxis in urban areas by 2030. This project is part of a wider movement towards sustainable urban mobility in Southeast Asia.
- As part of their environmental-science efforts, Vietnam's ride-hailing companies are integrating technology, such as electric vehicles (EVs), into their operations to combat climate-change by reducing urban emissions, especially in Ho Chi Minh City.
- Recognizing the impact of lifestyle choices on the environment, partners like Grab, BYD Vietnam, and VinFast are collaborating to offer incentives, like guaranteed income for Grab car drivers, and promoting electric vehicles like the M6, to encourage drivers to switch to more sustainable choices.
- With the growing emphasis on science and technology, cities like Ho Chi Minh City are investing in infrastructure, such as charging stations and battery-swap points, to support the increasing number of electric vehicles in their ride-hailing market, including buses and ride-hailing vehicles, contributing to the transition towards a more sustainable lifestyle.
