Vietnam runs a socialist market oriented economy for its 95 million citizens which is ranked 45th globally by nominal gross domestic product at $241.272 billion and 33rd globally as measured by purchasing power parity at $710.552 billion. Its nominal GDP per capita is $2,551 while its per capita income PPP is $7,513. Agriculture contributes 15.3 percent with Vietnam being one of the major producers and exporters of rice globally that is consumed in various countries including Nigeria while its industrial sector’s contribution is 33.3 percent and its services sector 51 percent. 

From January to December 2018 Vietnam earned $244.72 billion from exports of finished goods such as garments, shoes, and smartphones according to the General Department of Vietnam Customs. In the same year its earnings from smartphones and associated hardware was over $50 billion as leading consumer electronics manufacturers such as Samsung and LG operate smartphone manufacturing plants which contribute significantly to its huge export earnings. The current inflation rate as at 2019 is 3.540 percent and population of Vietnamese in poverty is 8 percent with a labour force of 56 million and 75 percent of them employed.

Vietnam recorded GDP growth of 6.2 percent in 2016, 6.8 percent in 2017, 7.1 percent in 2018 and 6.6 percent in 2019, and is projected to remain robust at around 6.5 percent in 2020 and 2021. Its remarkable developmental strides over the past thirty years can be traced to economic and political reforms launched in 1986 under the Doi Moi.

The guiding principle of Vietnam’s economic development strategy as stated  during the 7th National Congress Central Committee is that ‘’Industrialization and Modernization is a process of fundamental and all rounded change of production, business, services  and social and economic management from the predominant use of artisanal labour to a predominant use of labour power with technology, methods and ways of working that are advanced, modern and rely upon the development of industry and scientific technical progress to create high labour production and so from a theoretical and practical view industrialization and modernization are necessary historical process Vietnam must undergo in its redesign to an industrial economy’’

Vietnam has liberalized trade over the past 30 years establishing trade agreements with various partners to promote it as a major production hub in the world. In 1995, it joined the Association of SouthEast Asian Nations and in 2000 signed a free trade agreement with the US, becoming a member of the World Trade Organization in 2007. Since then, it has integrated itself into the world economy with bilateral agreements with other ASEAN countries, China, India, Japan,Korea, etc.  Vietnam has been actively working with other partners on ratifying the Trans-Pacific Partnership to form CP TPP or TPP II after the withdrawal of the US which is aimed at promoting economic cooperation, regional connectivity and economic growth between member countries.

The World Bank estimates that the CP TPP will grow Vietnam’s GPP by 1.1 percent by 2020 and boost productivity. The overall impact of these efforts was a reduction in tariffs on imported and exported goods or services to and from Vietnam and an improved trade balance with a surplus of $2.8 billion during the first eight months of 2018 according to the General Department of Vietnam Customs. Recently on 30thJune 2019, Vietnam signed the Free Trade Agreement and Investment Protection Agreement with the European Union after 10 years of negotiations which makes it the fourth Asian country to have such an agreement after Japan, South Korea and Singapore.

In order to create an open market economy with reduction in the cost of doing business, the Law On Foreign Investment which was first passed in 1986 and allows foreign enterprises to do business in Vietnam has been revised regularly to provide an investor friendly business climate, reducing bureaucracy in order to accelerate foreign direct investment into the country which has attracted leading consumer electronics firms and European and American fashion brands to establish manufacturing outlets in the country.

Vietnam ranks  48th out of 157 countries globally on the Human Capital Index and second in the ASEAN region after Singapore. Its HCI is the highest amongst middle income countries globally and this explains why amidst the ongoing US China Trade War, and as a result of demand for higher wages in China by factory workers, there is a redesign in the global hardware supply chain that has seen Original Equipment Manufacturers move to where preparation by state investment in human capital development is fixing the frictions which the opportunities present.

Opay’s Ocar, the latest addition to the series of the Opera System’s ventures is set to disrupt the dominance of UBER and Bolt (Taxify) in Nigeria. OCar is designed to run as e-hailing and ride sharing services.This is coming a few weeks after Opay announced additional funding of $120 million by Chinese investors. The idea of OCar seems to have emerged to replace OBus, which is operated by in house drivers, and has seen declining patronage recently.

The latest ride hailing app was launched in November, and has hit the streets of Lagos.

OCar’s ride-hailing app is incorporated into the Opay app and can be accessed therein to order rides. The operation has started in Lagos, but will get to other seven cities soon; mainly, Abuja, Owerri, Port Harcourt, Benin, Kaduna, Abeokuta, and Ibadan.

OCar follows the regular pattern of e-hailing companies to recruit drivers. The Opay app is downloaded from the Apple or Google store, and the applicant driver signs up, gets trained, before he could set off as an OCar driver.

The competitive e-hailing market has been dwelling on discount to woo both drivers and riders. So, OCar is operating on 15% commission for drivers as against the 25% that Uber is currently charging. Another company that charges its drivers 15% is Bolt, and the slash in the commission has pushed many drivers to embrace the app.

An excited Bolt driver said: “I can’t wait to start driving on OCar, they have 6 bonus plans.”

Opay however, has an enticing edge over other companies. The company said the 15% commission will be reduced to 3% after the driver has done 20 trips in a week. Concerning riders, the newbies are offering N200 per trip promo, for riders in Lagos, a good way to get even in the market already dominated by two giants.

Since American company Uber, and its Estonian counterpart, Bolt came to Nigeria; they have been enjoying undisrupted dominance in the e-hailing business. Other competitors like InDriver, OgaTaxi and GidiCab have not been able to upset the flexing muscle of Uber and Bolt. But it appears that Ocar is ready to change that, having the financial power and logistics needed to do that.

The success of OPay’s OFood, ORide, OList, OLeads and OTrike shows that the company has what it takes to claim a massive space in the ride-hailing market.

While OPay seems to have everything sorted out, there is still a challenge of pricing. The N200 per ride is just complementary incentive to riders in its effort to woo them; therefore, it wouldn’t last long. What happens after the promo in terms of pricing determines if riders would stick to OCar or not.

In 2016, Taxify used price slashing to loosen Uber’s grip on riders, and Uber responded by slashing the price even lower. Since then, pricing has been the major technique competitors use to win riders. But the practice has been at the loss of drivers mostly, and many of them are looking for where their interest would be protected.

Though these companies find other ways to compensate the drivers, like bonuses based on the number of trips completed at a given period of the day or weekend, it is usually unattainable, especially for drivers in Lagos due to traffic and ride requests. Riders also get bonuses depending on number of trips they make on the apps, but that too has not stopped them from complaining that the ride fare is high.

Recently, it was reported that ORide has halted all trip bonuses on its platform, following complaints from customers that the fare is high. So it goes two ways, any of the companies could halt any bonus for either drivers or riders at any time. And that’s a cause for concern especially when the trip fare is considered unfair.

The e-hailing riders and drivers have one thing in common; they mostly use all the platforms and switch to anyone with a better offer at any given time. Therefore, the competitors keep an eye on each other and are ever ready to replicate whatever is winning in the most enticing way. That means, if OCar crashes its ride fares, Uber and Bolt are likely going to do the same.

But OCar apparently has no choice; its chances to disrupt Uber and Bolt dominance lie on the number of drivers and riders on its platform. And there is no other way around it apart from dishing out irresistible offers to both drivers and riders.