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Vietnam faces delivery rider shortage during deadly fourth wave

Written by Stephanie Pearl Li Published on     4 mins read

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Riders take risks to deliver essential items but face fines if they do not meet strict requirements set by the state. 

Countries in Southeast Asia have implemented various forms of lockdowns. Vietnam was trumpeted as a success case last year, when it was able to keep COVID infection rates low. Now, the country faces its fourth wave, and people are hunkering down until it passes. That means food and necessities need to be delivered to their doorstep, but delivery workers must navigate opaque, confusing rules for essential workers. Harsh punishments meted out by police and the risk of being infected have created a shortage of delivery drivers in Vietnam’s major cities.

Tai is a delivery worker in Ho Chi Minh City that has kept supplies moving through the business hub throughout Vietnam’s deadly fourth wave that began in late April. Although the government had said logistics personnel can be on the road to distribute essential supplies even during curfew hours, which lasts from 6:00 p.m. to 6:00 a.m. each day, police checkpoints were set up throughout the city. In some cases, riders were slapped with fines for being in public areas. That’s what happened to Tai.

The rider then phoned his employer, a delivery startup called AhaMove, but the company’s representatives was also surprised by the penalty. “I phoned the call center and also searched for relevant information, but I still do not know if we can work after 6:00 p.m.,” Tai told local media outlet VnExpress in late July.

The Vietnamese government has issued public statements that are meant to map out operational limits for delivery services, but these decrees are light on definitions and details. “From July 26, 2021, only delivery services are allowed to transport essential goods while ensuring epidemic prevention and control measures, in accordance with regulations to operate in Ho Chi Minh City,” the authorities said in a directive published on July 26.

As frustration mounts among delivery workers, the startups that employ them struggle with worker shortages. Riders who do take these jobs risk falling ill and face potential fines as they navigate vague rules.

The July 26 directive mandates delivery workers to wear a badge that shows their name and company logo. They must also apply for a QR code that displays their personal and vehicle information. Drivers are restricted to making deliveries in one district and must undergo COVID tests once every seven days. Delivery firms were ordered to cut 10% of their logistics workforce.

The staff shortage is well documented in local media reports. In one article published by Tuoi Tre News on August 2, AhaMove CEO Phan Tuong Bach said that even though his company bumped up remuneration to recruit new drivers, it is still struggling to hire workers. He added that residents in Ho Chi Minh City place around 100,000 delivery orders per day.

A delivery driver told Tuoi Tre News that 80–90% of his income was from distributing shipments from one district to another. Government-mandated movement restrictions have eliminate this source of revenue. With the new directive in place, Grab has limited inter-district parcel deliveries to temper the spike in fees during the labor crunch. Gojek said it will not hike its rates for deliveries, while demand has jumped 600%.

Local and regional tech platforms like Grab, Gojek, Sea Group subsidiary Now.vn, and Woowa Brothers-owned Beamin have suspended their food delivery services in Ho Chi Minh City since July 9 and in Hanoi since July 24.

“It’s not only about the driver shortages and the rising demand. We also see an increasing risk in the work environment of drivers,” Trung Hoang Nguyen, CEO of Loship, which operates an on-demand delivery platform and C2C e-commerce portal, told KrASIA.

“Sometimes, the unclear definition of ‘essential goods’ can put drivers in difficult situations. Delivery drivers need to spend more time and effort demonstrating the necessity of an item at each checkpoint,” he said.

Loship has doubled commission for its drivers. The company claims that its drivers earn up to USD 100 a day, and said it is coordinating with the Ministry of Health to vaccinate its entire pool of riders. Nguyen added that Loship’s new measures have helped ensure “a reasonable supply of drivers” for the company.

On Wednesday, Loship said it bagged USD 12 million in a pre-Series C funding round led by Ant Group-backed VC firm BAce Capital and Hong Kong-listed investment firm Sun Hung Kai & Co.

Despite the challenges, Loship’s CEO remains optimistic. “This is not the first lockdown in Vietnam and we believe it will not be the last. We have developed an internal playbook on what to do when strict lockdowns are imposed,” he said.

Read this: As Vietnam grapples with deadly fourth wave, telehealth startups pitch in with free services

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