Court orders Grab to pay $206,985 to Vietnamese taxi operator
JUST as popular superapp – Grab – was looking forward to ushering the new year after having dealt with several run-ins with regulators this year, the Southeast Asian tech giant found itself in yet another legal bind.
Grab after losing its legal battle against a local taxi operator in Hanoi, was ordered by the Vietnamese court to shell out US$206,985 in compensation to the company.
The protracted legal proceeding that lasted 18 months is one of the rare occurrences of traditional taxi provider suing a ride-hailing service over revenue loss according to media reports.
Local firm Vietnam Sun Corp, otherwise known as Vinasun had brought the suit seeking 41.2 billion dong (US$ 1.8 million) in damages due to what it alleged as Grab’s unfair business practices.
The court in its verdict had found that Grab had violated Vietnamese statutes as it operated as a taxi company and not just a tech firm, local media reported.
In deliberating the case, the judge had found that there is a link between Grab’s operation and Vinasun’s loss of revenue. However, the ride-hailing app is not the only reason for the taxi firm’s decline in revenue.
Vinasun had no further comment on the court’s judgment.
Meanwhile, Hoang Ngoc Giao, Director of the Institute for Policy, Law and Development Studies in Hanoi, in reacting to the decision said that it went against the Vietnamese consumers’ interest.
“The decision will set a precedent that hinders the development of a digital economy in Vietnam, and will discourage the development of several companies,” he said.
Grab, via a statement announced that it plans to file an appeal against the court’s decision.
“We are prepared to launch a defamation lawsuit against Vinasun, and all other parties that have colluded with Vinasun if there is no retraction of the baseless allegations made towards Grab,” it said.
Earlier last week, the ride-hailing company also had urged Vinasun to “evolve and transform” its business model instead of seeking to “discourage the entry of innovative companies.”
“It is unreasonable for this court case to drag indefinitely just to allow Vinasun to build its case – when there’s none at all,” it had said.
Grab’s meteoric rise to be a tech titan in the Southeast region is not without roadblocks.
Last July Grab had found itself in trouble with regulators in Singapore and subsequently in the Philippines for violating anti-monopoly laws and was slapped with fines of US$9.5 million and US$300,000 respectively.