Uber's ride hailing service is finally legal in Vietnam

By Anh Duy   April 11, 2017 | 02:22 pm GMT+7

The ride-hailing firm has now secured approval from local authorities after two previous rejections.

The Vietnamese government has finally approved Uber's application to trial its ride hailing services, a minister said, after having rejected requests from the company twice since 2015.

Deputy Transport Minister Nguyen Hong Truong said on Monday that Uber Vietnam has fulfilled all necessary conditions to pilot its online ride-hailing application. However, the company will still need approval from local authorities before it starts operating, Truong added.

The main obstacle facing Uber's quest to legally offer its services in Vietnam was mainly its failure to register Uber Vietnam as a ride service provider since its arrival in June 2014 as the company expanded into Southeast Asia. 

Previously, Uber Vietnam was only registered to offer “consulting and management” and “market research and public opinion polling”. Now, it's also registered to offer "information technology services and other computer related services."

The Transport Ministry previously said that Uber Vietnam's authorization given by its parent company - the Netherlands-based Uber International Holding BV - which provides the smartphone application for Uber services, was insufficient.

Market regulators said the parent company should be held responsible for the application rather than its Vietnamese business unit.

Local regulators outlawed Uber's smartphone app-based services in November 2015 after they flagged the company for tax avoidance.

In an attempt to regulate ride-sharing services, Vietnamese regulators have allowed companies to run pilot programs through IT applications under 3-year contracts. Vietnam's transport authorities earlier approved a pilot scheme for Grab Vietnam, Uber's main rival, that also entered Vietnam in 2014.

The Malaysia-based Grab was previously the only foreign-run transport service allowed to operate in five cities across Vietnam using registered private vehicles between 2016 and 2018.