The High Court in Ho Chi Minh City yesterday ordered Grab to pay taxi firm Vinasun VND4.8 billion (USD 208,700) in damages after the ride-hailing giant lost an appeal in a long-disputed lawsuit.
The court upheld the first instance decision issued in late 2018, which ruled that Grab’s entrance to the Vietnamese market in 2015 had negatively affected Vinasun and that Grab was able to rapidly expand its services in the country due to unfair competition.
This amount is lower than that of Vinasun’s petition for compensation of nearly VND42 billion (nearly USD 1.8 million).
Yesterday, the court reaffirmed that Grab’s business models did cause many consequences for transport enterprises in particular and traditional businesses in general because the company was not subjected to the same level of business and tax requirements.
The case is extremely complicated and both parties have been dragging it on for about two years now. It also has received extensive media coverage and attention from the public as Grab and other ride-hailing apps have become indispensable to many Vietnamese urbanites.
The case also poses a major headache for local authorities that have been struggling to regulate new businesses and tech-driven models capitalizing on Vietnam’s growing base of digital-savvy consumers. This culminated in a government decree issued in January to legalize car-hailing services.
In a statement, Grab reacted to the court decision, calling it a “sad day for technology and innovation in Vietnam” and that Vinasun’s allegations were “baseless.”
“By allowing a lawsuit of such anti-competitive nature to prevail, this has a deterrent effect on tech innovation and poses very challenging business conditions for local and foreign tech companies and investors. It appears that the court has chosen to continue to protect the traditional way of doing business, instead of embracing technology as a way to push the traditional players to be more efficient and innovative,” the statement said.
Grab noted that it will seek “recourse to ensure our basic right to a fair trial and due process is served,” implying that it’s likely to appeal the decision.
This is the second legal setback for Grab this week. On Monday, Malaysia’s High Court also dismissed its request to review the proposed decision by the Malaysia Competition Commission on fining the company USD 20.9 million for abusing its dominant position to prevent drivers from “promoting and providing advertising services for its competitors.”