Nguyen Hoang Hai, director of the Hanoi Urban Transport Management and Operation Centre (TRAMOC), said Wednesday that public buses only carry 12 percent of the total number of commuters.

"The figure was 10 percent five years ago. It has been growing slowly, while the city targets to increase bus market share to 20 percent by next year."

One of the reasons for the slow growth is the rapid expansion in ride-hailing services, making the 2020 target a big challenge. 

Ride-hailing services like Grab, Go-Viet and Be are flexible and priced competitively. A bus ticket costs VND5,000-6,000 (21-26 cents). But a Go-Viet motorbike ride costs less than VND5,000 (21 cents) for short distances when there are promotions while a GrabBike for two kilometers costs only VND12,000 (51 cents) after discounts.

Another is the declining speed of buses due to the crowded streets. The average speed was 23 kilometers per hour in 2010, but has fallen to 20 kilometers this year, Hai said.

Most roads do not have a dedicated bus lane, making it difficult for these vehicles amid the city’s congestion, he added. "Hanoi needs to have a dedicated lane for buses to separate it from other vehicles. But this needs to be done with public approval."

Hanoi’s 2,000 buses carry 1.2 million passengers a day. Of the 123 routes, 100 are subsidized by the city. 

A similar situation is also seen in Ho Chi Minh City. In May authorities said public buses are losing passengers to ride-hailing services, which are offering competitive prices.

Last year the city Department of Transport said ride-hailing motorbikes had affected the revenues of bus companies after the number of passengers fell by 3 percent to 571 million to miss the year’s target by 10 percent. Seven bus routes were discontinued due to heavy losses, they added.