Business

Grab ordered to pay Vietnamese cab firm $282,000

HANOI: Grab was ordered to pay 4.8 billion dong (S$282,000) in compensation to a local taxi operator by a Vietnamese court on Friday last week, sources and state media said.

The 18-month-long legal battle between the two companies marks a rare instance of a taxi company suing a ride-hailing rival over lost revenue.

Vietnam Sun, or Vinasun, had sought 41.2 billion dong in compensation for what it said were Grab's unfair business practices.

Grab plans to appeal the court's decision, the company said in a statement.

"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.

In its verdict, the court found that Grab violated Vietnamese regulations because it operates as a taxi company, and not just as a technology company, the Tuoi Tre newspaper reported.

The judge presiding over the case also said there was a link between the operations of Grab and Vinasun's lost revenue, but said Grab was not the only factor behind those losses, the report said.

Dr Hoang Ngoc Giao, director of the Institute for Policy, Law and Development Studies in Hanoi, said the court's decision went against the interest of Vietnamese consumers.

"The decision will set a precedent that hinders the development of a digital economy in Vietnam and will discourage the development of several companies."

Grab said in a statement earlier this week that Vinasun needed to "evolve and transform" its business and should not "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 is none at all," Grab said in the statement. - REUTERS

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