Vinataxi Business Idea
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VinaTaxi
Business Idea
This section describes what factors made Mr. Allan Ho to think about the need of better, reliable, convenient transportation services in Ho Chi Minh City and how he started thinking this need as a business plan around late 1980s.
During the Period 1950s to 1970s, the city had poor public transportation, non-exist in many parts. The buses were old, ran infrequently. Most of the city residents used motorized bicycles, motor scooters, or small motor cycles to travel than by bicycles. The taxies in the city were mostly American, French and Russian cars without meters, air-conditioners, radio paging (services), and headlights. Moreover, lack of traffic lights put safety in question. The fair prices varied greatly depending upon time of day, location, and whether the traveler was a local resident or visiting foreigner. Hiring rental (or private) was quite expensive and on that passengers and drivers were sometimes stopped and asked for protection money by police. Pedal-powered “Cyclos” were unwilling to go to the city center because of the risk of getting fined, so were considered inconvenient and dangerous.
Vinataxi Startup
The above mentioned lack of taxi industry services and poor transportation system helped Mr. Ho (Hong Kong Native and a newly minted MBA graduate) to find a business opportunity
in Ho Chi Minh City. He approached Ministry of transportation (MOT) with his plan of improving Vietnams transportation system focusing on two main points:
Offer superior taxi services with the best taxi environment
Quickest response time for visiting foreigners
Mr. Ho proposed a joint venture between Transportation Communication Development Investment Corporation, the City Peoples Committee and the department of public works and transportation (30%) and Tecobest Investment Ltd.(70%), which later sold its 70% stake to British-based Beta Vietnam Fund. The joint venture was granted a ten year license in 1992 and Mr. Ho was responsible for all the operations aspects.
Operations
The Vinataxi fleet was grew to 200 taxies by summer 1995 comprised of 90 Nissan Sunnys, 60 Toyota Coronas, and 50 Mazda 323s. Mr. Ho himself visited the Philippines to check quality and durability of “Kia cars”, which were being used as Taxis there. He could not order more imported cars, because the import tax had increased to 200% of delivery price and Vinataxis tax-free car import quota was exhausted.
Taxies were dispatched by radio through eight paging operators to the Customers requesting taxi service. However, because all the taxi companies used the same radio frequency, several potential drivers would race to the pick-up location, impacting