The Road Less Traveled: Navigating the Luxury Taxi Service Industry in Vietnam

Taxi services in major cities around the world often utilize luxury vehicles as a way to enhance their service offerings and attract high-end clientele. This trend is not just limited to one or two companies but is a global phenomenon.

A Global Phenomenon

It is not uncommon to find taxi companies in Europe offering rides in Mercedes-Benz or in Japan, where Toyota Crowns are a popular choice for passengers seeking a more luxurious experience. However, these are just the tip of the iceberg when it comes to premium transportation services.

Most luxury taxi services are charged by the hour, with rates varying from a few dozen to a few hundred US dollars per hour, depending on the vehicle. In the UK, iChauffeur is a well-known luxury taxi brand that offers a range of high-end vehicles for their passengers’ comfort.

For example, iChauffeur provides transportation services using vehicles such as the Mercedes-Benz S-Class, E-Class, Range Rover, and even the Bentley Mulsanne, depending on the number of passengers and the distance of the journey. Their rates start at €75 per hour for an S-Class, which typically accommodates 3-4 passengers with 2 pieces of luggage. This rate is applicable for bookings of 3 hours or more. For shorter trips, the rate increases to €85 per hour, which is approximately 88 USD.

Mercedes-Benz S580. Source: Mercedes-Benz.

In France, ELEVENXI offers city tours in luxury SUVs, with rates starting at €350 per hour (over 362 USD) for a Range Rover that accommodates 2 passengers and 2 pieces of luggage. Moving to the Middle East, Dubai’s national taxi company, Dubai Taxi Company (DTC), provides a premium service with vehicles such as Limousines, BMWs, Genesis, Mercedes-Benz, and even Teslas.

Similar to regular taxi services, DTC charges by the kilometer, with the first kilometer costing 16 AED (approximately $4.36) and each additional kilometer costing 3.56 AED (approximately $1). In Japan, local taxi companies also offer luxury sedan options, including BMW 7 Series, Mercedes S-Class, and Audi A8, for those seeking a more opulent experience.

Estimated cost of a premium taxi ride in Japan.

For instance, a trip from Tokyo International Airport to the Tokyo Dome, a distance of approximately 14 kilometers, would cost around $277.80 in a premium taxi, resulting in a cost of approximately $19.80 per kilometer. These examples illustrate that despite the intense competition in the standard taxi market, there is still a significant demand for luxury transportation services.

A Niche Market in Vietnam

Before the advent of ride-sharing apps, traditional taxi companies like Mai Linh and Vina Sun dominated the market for premium taxi services in Vietnam. They offered MPVs and minivans such as the Toyota Innova and Fortuner, which were a step up from the basic models.

However, these vehicles were not truly luxury options, and there was a gap in the market for true high-end transportation services. In 2014, Uber entered the Vietnamese market and introduced a new level of sophistication with its UberEXEC service. With UberEXEC, passengers could travel in style in sedans such as Mercedes-Benz, BMW, or even Toyota Camry.

Uber EXEC offered rides in Toyota Camry or Mercedes-Benz. Source: Vinh Phuc.

UberEXEC had a base fare of 10,000 VND, and the rate was 17,000 VND per kilometer in 2015. This service was unique at the time as it allowed passengers to control the cost of their trip and was also available for shorter distances. After Uber’s departure from Vietnam, Xanh SM stepped in to fill the gap in the luxury taxi market.

They introduced the VinFast VF 8 to their fleet, providing a true luxury experience for passengers. Xanh SM invested significantly in this model, with each vehicle costing billions of VND, and they had strict requirements for their drivers, including appearance, attire, and even foreign language skills and communication abilities.

However, with the recent announcement that Xanh SM Luxury will discontinue its VF 8 taxi service, there is now a void in the market for true luxury taxi services. While Xanh SM has stated that these vehicles will be transferred to their car rental service, the convenience of booking a VF 8 taxi is no longer an option.

This creates an opportunity for other transportation companies to step up and meet the demand for premium services. Electric vehicles from VinFast, such as the VF 6, VF 7, and VF 8, as well as offerings from BYD and Aion, could be potential candidates for luxury taxi services, providing a more cost-effective alternative to gasoline or hybrid vehicles.

Additionally, the Vietnamese market has recently seen an influx of new SUV and MPV models from Chinese manufacturers, such as the Denza D9, GAC M8 Pro, and MG G50, which offer a more luxurious and modern experience. These vehicles could also play a role in diversifying the country’s transportation services and bringing them closer to global standards.