Grab dismisses Vietnam’s plan to treat it like taxi company as 'major setback'

Ride-hailing company Grab expressed frustration at Vietnam’s announcement to impose greater control over its operations on Friday, another development in the prolonged tension between Grab and traditional transport firms in the country.

Minister of Transport Nguyen Van The said on Thursday that companies like Grab or Uber must be treated as transport companies instead of tech companies regarding their operating licenses, drivers’ profiles and tax duties.

But Grab said that kind of control could stymie Vietnam’s technological progress and cause a major setback to the government’s efforts to make Vietnamese businesses more competitive with the world on the brink of a new industrial revolution.

“Defining Grab as a taxi company would be a denial to the Vietnamese government’s and our own efforts to push Vietnam’s technological prowess. It would also hinder Vietnam’s progress to become a startup nation in the age of Industry 4.0,” said Jerry Lim, director of Grab Vietnam.

He also added that Grab actually collaborates with other transport agencies and associations, supporting them through its open technological platform.

“As a tech company, we provide a bridge to connect vehicles and customers effectively. We do not own any vehicles or drivers ourselves,” said Lim.

“We hope that the Vietnamese government will have a more open and comprehensive approach when it comes to drafting policies regarding new technological platforms, so that Vietnam can catch up with other countries in the global, digital race,” the Grab leader affirmed.

The debate over Grab and Uber’s statuses as transport companies is hardly new in Vietnam.

Just last February, Vietnam’s top taxi company Vinasun sued Grab for $1.84 million in losses, citing “unhealthy competition”. Nguyen Hai Van, Vinasun’s lawyer, argued that Grab had broken the law by running a taxi transport service. He said Grab had directly managed routes, directed drivers and decided service costs, all traits of a traditional taxi company.

In addition, the firm had offered mass discounts, fined drivers who violated its regulations and cooperated with banks to help drivers access loans, all of which points towards Grab operating a taxi transport service, Van said.

In response, lawyer Luu Tien Dung for Grab said Vinasun should provide evidence of Grab’s alleged violations, detailed calculations of the actual damage it had caused Vinasun, and the cause-and effect relationship between the two issues.

The trial was suspended on Wednesday after the court asked to see more evidence before making a ruling.

Grab and Uber arrived in 2014 and operate both car and motorbike taxi services. The two services have been running on a trial basis since early 2016, but have been caught up in a war with traditional taxi drivers.

Many taxi firms have accused Grab and Uber of “unfair competition” that has hindered their businesses and caused thousands of drivers to quit.

In January, the Ministry of Transport said Grab and Uber are to be officially authorized in Vietnam after completing trial runs, and the government has pledged to impose the stricter controls that currently govern local transport firms.

Vietnam is not the only nation where the appearance of new, disruptive tech companies have sparked heated arguments regarding their operations.

In 2017, the European Court of Justice judged that Uber is in fact a transport service company instead of a purely technological firm.