Hanoi Taxi Association recommends to stop Grab and Uber services

The Hanoi Taxi Association has sent a report to the authorities regarding pilot plan of science and technology deployment to support the management and connection of passenger transport services under contract, such as Grab and Uber.

The Association recommended the emergency stoppage of the Pilot Plan in September 2017, concluding with a review of the pilot implications, which is believed to cause more insecurity in society.
According to the recommendations, the Ministry of Transport (MOT) should issue documents to localities to stop issuing badges for the pilot vehicles, not stop the expansion of enterprises to participate in the pilot. It is necessary to agree on the nature and name of Grab and Uber service in Vietnam.
Chairman of the Hanoi Tax Association said that the nature of Uber and Grab is the software business services involved in transport activities and it is conditional business type (car under 9 seats operating as taxi).
Uber and Grab must establish a company in Vietnam, have the license to provide transportation services and comply with the conditions of transportation business in Vietnam.
The association is also proposing the management of passenger transport business for car upto 9 seats using information technology such as taxi in terms of quantity, quality, scope of operation and inclusion in the transport planning in Hanoi until 2030.
Hanoi Taxi Association said that the unlimited number of vehicles of the project leads to significant increase in taxi amount, causing traffic jams.
In Hanoi, there are 19,265 taxis and about 25,000 contracted vehicles. While the planning project to 2020 is 25,000 vehicles and 2030 is 30,000 vehicles.
Besides, the Hanoi Taxi Association also blames Uber and Grab for illegal activities, causing inequality at the airport and losses to the State budget.
In addition, the association also estimates the loss amount to the state budget due to the operation of the Uber and Grab.
With a total of over 50,000 vehicles, revenue of VND  30 million / car / month, total revenue is VND 1,500 billion / month. Meanwhile, at a tax rate of 4.5%, the total tax payable is VND 67.5 billion. However, these enterprises do not seriously fulfill the tax obligations, Uber just paid VND 10 billion to the budget.
Meanwhile, with 20% of the revenue that Uber and Grab is enjoyed, each year the cash outflow is about VND 3.600 billion, meaning that every day Uber, Grab transferred VND 10 billion to overseas.
In Ho Chi Minh City, the Department of Transport recently proposed solutions to manage the car business under contract to the Ho Chi Minh City People's Committee, in which propose Uber and Grab to suspense connecting new vehicles.
Restriction of new vehicle connections is explained to stabilize the transport situation in the area while pending for Ministry of Transport to summarize pilot plan of science and technology deployment to support the management and connection of passenger transport services under contract since January 2016.
Recently, CEO of Uber Vietnam has left the company. There is rumor that Uber Vietnam would be suspended due to tax problem, however it promptly refuted the news. The company had to pay nearly $3 million in back-taxes and fines last month, but it is unclear if this had any bearing on the decision.