After three years of operations in Vietnam, Grab is reportedly facing massive losses, according to the Ministry of Finance.
Vietnam’s finance ministry recently released a document in response to a query they received during a session of the National Assembly on Grab’s operations in the country, reports Tuoi Tre. According to the report, this year, Grab suffered a loss of VND938 billion (US$41.4 million).
The ministry shared that Grab Vietnam was established with initial funding of VND20 billion. The company has been hemorrhaging money ever since, as in 2014, 2015 and 2016 it recorded VND51.6 billion, VND441.8 billion and VND444.7 billion in losses, respectively.
According to the government body, Grab has been continuously operating at a loss due to its aggressive marketing campaigns and efforts to keep its service prices low in order to maintain a competitive edge against opponents.
At the moment, Grab Vietnam is mostly conducting its business through an interest-free loan of US$50 million from its parent company in Malaysia.
Due to the massive amounts of losses on record, the Ministry of Finance classifies the company as one with a “high risk” that requires close supervision.
The news source also quoted the tax office of District 10 as saying that the ride-hailing firm paid VND142 billion (US$63 million) worth of taxes for the period from January to November this year.
[Photo via Autovina]
