Every morning, at about 8 o’clock, Mr. Nguyen Huu Tuat booked a FastCar ride from home to office. “But only in case of importance business that I use personal vehicle. Otherwise, FastGo is still my usual means of transportation,” Mr. Tuat said.
Mr. Tuat may be one of the few CEOs – Founders, who often use their start-up services on daily tasks. “It is not just about love, it is also the responsibility and obligation that I have for FastGo. We run the service so if we don’t experience it and don’t take care of it carefully, we’ll neither understand nor meet the customers’ demand,” said FastGo CEO.
However, perhaps Mr. Nguyen Huu Tuat is not the one, who “loves” FastGo the most. The CEO revealed, according to the statistics of this Vietnamese ride-hailing application, Mr Tuat is the user with second-most number of uses since its launch. “I am very surprised when knowing there is a customer even loving FastGo more than the CEO of the application,” he said, smiling very freshly.
With Mr. Tuat, every FastGo trip is a memorable memory. Once being on the car, the driver immediately recognised the CEO of FastGo. Knowing that the CEO and FastGo’s team are always accompanying, following the driver-partners, they were very happy.
Some drivers also said that they read most of his articles and statements on the media. Thanks to that, the driver team understands FastGo more. As a result, they increasingly trust and support FastGo as much as they can. Meanwhile, others shared their opinions with Mr. Tuat and gave out their recommendation very frankly so that FastGo can grow and develop strongly.
“Many drivers told me that they were willing to sacrifice for FastGo for the long-term benefits. Because only being here, with FastGo, they were respected and truly master their own works. Some people even consider FastGo as their own product, hence they take care of it more and consciously serve the customers,” said Nguyen Huu Tuat.
Mr. Nguyen Huu Tuat is known as one of the three co-founders of Peacesoft Technology Group, later changed its name to Nexttech. He joined the company in the period 2001 – 2002. In the first 5 years, when Mr. Nguyen Huu Tuat and Nguyen Hoa Binh still were the college students, they worked together to study and implement a large number of scientific solutions.
In 2005, Peacesoft was one of the first Vietnamese enterprises accessing E-Commerce industry. In the period of 2005 – 2009, Peacesoft’s e-market products continuously grew dramatically. In 2009, Peacesoft entered the field of payment, COD, and so on. During those years, Mr. Tuat was the CTO – Chief Technology Officer of Peacesoft.
In 2013, MPOS – a company of Peacesoft specializing in payment solutions on the mobile platform was born. Mr. Tuat took the position of CEO, and is also currently the CEO of the FastGo ride-hailing application.
According to the 1983-born CEO, FastGo was not formed out of the blue like many people thought it was. It was a journey that his colleagues and he had cherished for more than 3 years. Specifically, it began in 2015, when Uber and Grab first appeared in Vietnam, the prospect that traditional taxi was fiercely competitive with Uber and Grab, even hardly survived under the developing period of hi-tech taxis system, was predicted.
“At that time, we used to ask a question: What to do to compete with Uber and Grab?” Mr. Tuat wondered. The fate comes to the young CEO when MPOS implemented the payment solutions for Mai Linh Group. From there, Mai Linh wanted to develop a technology platform to modernize their current transport business model. Hence, Mr. Tuat was obsessed by the idea of applying technology platform to reduce the cost and increase the competitiveness in the market.
In March 2018, with the rumors of Uber’s withdrawing from Southeast Asia, the idea of launching a FastGo ride-hailing app was increasingly urging Mr. Nguyen Huu Tuat to implement it in reality. The CEO called this ‘a great opportunity’. “A growing market always needs two to three players. Uber’s withdrawal would be the opportunities for other start-ups to enter the market. It could be said that FastGo is the missing piece in the multi-service ecosystem that we have been preparing for 15 years in Nexttech. Instead of just staying behind the traditional taxi units, it is the right time for FastGo to move forward,” said FastGo CEO.
According to Mr. Nguyen Huu Tuat, the traditional products and type of start-ups of Nexttech always carry 3 big DNA substances, which are in turn: helping businesses to facilitate themselves and transform their businesses, providing technology for them to compete with each other, and developing shared open platforms to reduce the foreign investment and create links between those businesses.
FastGo was born with all three outstanding DNA substances. The CEO described, FastGo can be considered as an extended arm to help the transport taxi units to reach the customers more easily that is also a factor, which traditional businesses are lacking.
Talking about the ride-hailing market in Vietnam, Tuat said, both Grab and Uber had only just stepped past the market opening stage. That is, in the short term, other ride-hailing application companies still have a battle to fight for their market shares and then to exploit the market. Therefore, the space reserved for other ride-hailing application companies is still very large.
“Uber’s withdrawal from the Vietnamese market does not mean that all drivers agree to join Grab. I think that when the two rival companies, Uber and Grab, merged, there would be wounds left. Therefore, if Uber drivers don’t want to join Grab, where will they go? That could be an opportunity for FastGo,” said the 1983-born CEO.
Or as Grab often increases the prices during the peak hours, this is also an opportunity for FastGo. Specifically, during peak hours, FastGo application only applies a price equal to 2 thirds of Grab.
“Obviously, FastGo’s price range is more attractive. But the problem for us is how to make the drivers accept the rides of our price range? Here, FastGo must balance 2 things, which are drivers’ benefits during peak hours and the customer’s benefits. As for the drivers, Grab can increase the price to 1.5 times, but the commission fee is nearly 30%, while FastGo does not charge that fee. However, to not make the drivers disadvantaged, FastGo offers tips function for customers to pay more for the drivers. From a consumer perspective, customers will be proactive in deciding how much to pay for the ride, as well as proactively using the service, instead of having to use the current high price,” CEO FastGo said.
Of course, besides the price factor, customer benefits are also an important factor determining the capacity of the ride-hailing application. According to Tuat, when participating in the market, every ride-hailing application company always says that they respect the partners, and the customers. But only when a problem occurs, an issue arises, the true ability of that company will be revealed.
“If FastGo keep utilising the discounts and promotions strategy like Grab, FastGo has lost from the starting line. At FastGo, we uphold the spirit of supporting and serving our partners. Therefore, the driver partners always consider FastGo as a companion. When I have the opportunity to interact with drivers directly, I am always happy to know that they always put FastGo on the priority list. By all means, they serve the customers with the highest spirit of customers service. The driver partners understand that, if FastGo develops, they themselves will develop. And thanks to that spirit, the percentage of customers returning to FastGo is quite high, over 50%,” said Nguyen Huu Tuat.
According to the 1983-born CEO, FastGo has its own strategy. We determine that the ride-hailing market is a long-term game, then we develop a 3-year roadmap to evolve. In fact, at the same time with FastGo, there were many Vietnamese ride-hailing apps launched, but only a few months later, they had to quit the game.
If applying discounts, and promotions like Grab did or doing the same communication strategy with the others, FastGo has been the loser. Each business has its own strategy. Determining that this is a long game, it will take about 3 years to grow step by step. Many businesses launched and only a few months later, they had to leave the game. Meanwhile, FastGo is still growing.
“Once we have outlined a specific roadmap for our business, FastGo will expand very quickly, occupy key and beneficial positions in the market that helps FastGo keep its market share target at about 30%. In my opinion, the key point here should be understood: who will win the driver’s decisions, who maintains the growth, finance, who exploits satellite services, and creates better revenue,” stressed CEO FastGo.
After nearly 1 year joining the market, do you have any comments about this playground in Vietnam?
Mr. Nguyen Huu Tuat said, “There is a trend that we have noticed, that is when the great foreign companies join the Vietnamese ride-hailing market, they all pour in a lot of money. As a result, this business opens up many opportunities for the ecosystem to revolve around it. And that is the destination they aim for”.
In the world, this is called an on-demand service model, which means when bringing any service to the customers, they will try to attract customers using only one single platform, one application. This model is much more attractive than the only model customers are seeing. It is the ride-hailing application. The on-demand service model would bring a huge amount of values.
Understandably, ride-hailing application is just the method so that through it, other platforms will be able to reach the users. Once the user is familiar with the application and the driver is familiar with how it works, the platforms will develop more type of services.
And this is also the model that Nexttech Group pursued for many years. Part of the reason we rushed to launch FastGo is if we lose the market share in the car segment, we may lose the market share in other areas as well in the future.
You have just mentioned the ecosystem of services around the ride-hailing application. Can you describe this ecosystem?
Mr. Nguyen Huu Tuat: “As far as I am observed, the ecosystem around the ride-hailing application is only being formed, but there is no specific form. To make it easier to imagine, let’s take an example. When the customer book a ride, the most relevant service that everyone can think of right away is the payment service.
In addition to paying cash, all the apps develop the card and e-wallet payment services. This means, for every new service that comes out, there will be more interoperable services. Increasingly, when these services grow, the ecosystem will be formed.
I think, ride-hailing service is not really the focus point of the demand-driven service model. It must be the payment service because it will be the blood vessel connecting the services together. Secondly, there are other important services for small and medium enterprises, such as delivery.
So in your opinion, what is the reason of the fact that the ride-hailing service is chosen to be a pioneer service in the current on-demand service model?
Mr. Nguyen Huu Tuat: “I think that the ride-hailing services will always be hot because travelling is an essential need in our lives. In fact, it has been proved that, even though the ride-hailing applications were born a few years ago, the behaviour of booking rides from the consumers has become very popular that turning into an indispensable habit. If you ask 10 people, I am sure there must be at least 7 people who have used the ride-hailing service.”
Therefore, in this game, the winner will be the one providing the best service market, developing the most sustainable model. Businesses may fail, but consumer demand will always be there.
If given predictions, what would be the ripe time of ride-hailing service in Vietnam, according to you?
Mr. Nguyen Huu Tuat: “In my opinion, at least 5 years from now, the ride-hailing market in Vietnam will officially go into the orbit. At this time, the domestic market is still quite primitive.”
That is the reason why FastGo has just launched in Vietnam, but we set the goal of simultaneously coming into other countries such as Myanmar, Singapore and Indonesia soon.
Everyone is looking at Vietnam as their home ground, and Southeast Asia is the extra market. While FastGo determines Southeast Asia is the home, and the other markets are the extra markets. This strategy is similar with the story of Viettel going to the countryside before moving to the cities.
For young start-ups, they work in Vietnam, they only stay in Vietnam. However, for Nexttech Group, who has a lot of experiences in Southeast Asia market, we consider every market the same.
It is known that FastGo has now deployed a ride-hailing service in Myanmar, I do hope you share more about the company’s activities in this market?
Mr. Nguyen Huu Tuat: First, we chose Yagon city in Myanmar, because this market has many advantages. Yagon banned completely motorcycles. There are about 70,000 taxis in operation, but there are no big professional taxi companies. Besides, Myanmar is also in the developing stage and the population is very large. Therefore, FastGo decided to invest and associate with the local units. I predict that Myanmar will be a good market in the next 3 years that will be equivalent to the Vietnam market.
Secondly, in Myanmar there was Grab. FastGo’s goal is to be in the Top 3 in Southeast Asia and Grab is currently leading. Therefore, if they have researched and shaped the market, then FastGo will follow.
Personally, Grab is currently acting as a pioneer to explore the market, but as you know, one person cannot cover the sky with only one hand. Usually, the areas that are considered healthy need 2 to 3 players, so I think the field of ride-hailing is still open. I believe, this is an opportunity for FastGo to make the mark.
What makes you so confident in FastGo?
Mr. Nguyen Huu Tuat: Not only FastGo, but regardless of any businesses, which have activities and services contributing to the society, creating a balance for the market, creating value for the customers, will also have a faith like mine.
Nexttech is not a new player in the market. We understand our capacities. With FastGo, we simply join a new field.
In particular about the Vietnam market, I think that the market share of ride-hailing services will be divided into 2 clear segments, which are one for traditional taxis, one for hi-tech taxis system. The rate may be 30/70.
The reason of that rate is that the market share of traditional taxi enterprises is decreasing even though recently they have collaborated with each other to launch new applications. Their connection and collaboration have not been resonant to solve the root of issues. At that time, it was necessary to have technology companies like FastGo coming into the market. Simply when the business aims to innovate, apply new technologies, but has not mastered the technology, it will lack competitiveness.
– Viet Hung (11/03/2019)
– Translator by Phuong Le
