Ride-hailing firm Grab denies allegations of multi-million dollar tax evasion in Vietnam

By Anh Tu   October 3, 2017 | 02:52 am PT
Ride-hailing firm Grab denies allegations of multi-million dollar tax evasion in Vietnam
Grab motorbike drivers wait for customers in Hanoi. Photo by AFP/Hoang Dinh Nam
Rival taxi companies that are losing out to Grab claim it is shifting money into overseas accounts to foil detection.

Grab Vietnam has dismissed accusations made by traditional taxi firms that it has been transferring money overseas to dodge taxes in Vietnam.

Nguyen Thu An, director of communications for the local subsidiary of the Malaysia-based ride-hailing company, said in a statement that the accusations were “completely false and groundless."

They also violated the law and damaged the reputation of the company and its partners, she said.

An was responding to a petition filed by the Hanoi Taxi Association last week that asked authorities to curb the development of Uber and Grab, which it said have been transferring a combined VND3.6 trillion ($158.4 million) overseas every year.

An said that Grab Vietnam has always fulfilled its tax obligations, and that its tax payments in Vietnam have been increasing nearly fourfold each year.

Uber Vietnam, whose CEO stepped down this month, has not commented on the matter.

Grab entered Vietnam in February 2014 several months before its main rival Uber. Both operate car and motorbike taxi services.

Like in most other countries where they are available, the tech-based apps have all but upended traditional services in Vietnam.

Taxi firms in Hanoi and Saigon have repeatedly harped on losing business to the newcomers who they claim are subject to more relaxed tax and operational regulations. Vinasun, the country’s largest taxi firm, said 8,000 of its drivers quit in the first half of this year, while Mai Linh, another major firm, reported 6,000 drivers leaving.

In the latest petition, the Hanoi Taxi Association said that the number of taxis in Hanoi and Saigon, including Uber and Grab cars, has reached 80,000, and far beyond the number planned for both cities.

“We need to immediately stop further growth of these cars,” it said.

Saigon, the country’s largest city where traffic jams occur at any time of day now, has already taken action.

Last month, the city instructed Uber and Grab to delay any plans they have of expanding their fleets.

The city’s transport department said that the number of cars providing ride-hailing taxi service in the city has increased from 300 in late 2015 to more than 23,000 today.

Together with traditional taxi cars, the city’s roads are now filled with more than 34,000 cabs, sabotaging its plan to cap that figure at 12,700 in 2020, the department said.

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