HCMC court stalls Grab trial after reopening hearing for one day

A court in Ho Chi Minh City suspended a hearing regarding a dispute between Vietnam’s top taxi company Vinasun and ride-hailing firm Grab on Wednesday just a day after it reopened.

The judicial panel said the court needed to see more evidence from the city’s transport, industry and trade and planning and investment before making a ruling.

Vinasun is trying to sue GrabTaxi Vietnam for “unhealthy competition” and dumping its service on the domestic market to drive out local competitors.

The Vietnamese taxi firm is looking for VND42 billion ($1.84 million) in compensation, calculated by the profit loss it claims to have suffered due to the Malaysia-based firm in 2016 and 2017.

A month ago, the People’s Court of Ho Chi Minh City suspended the case and requested more evidence after a two-day hearing.

The plaintiff said that Grab had signed contracts with transport cooperatives that allowed drivers to use the app, and asked for a list of those cooperatives to be provided. Grab is not allowed to directly sign contracts with individual drivers in Vietnam.

At the hearing last month, a Grab representative said the firm had not been able to draw up a list, but would provide one and sample contracts at a later date.

The judges said the court wanted to clarify whether Grab provides an app connecting transport cooperatives or actual transport services to assess the suit in a comprehensive and objective manner.

Lawyer Nguyen Hai Van for Vinasun said Grab had broken the law by running a taxi transport service, but the Grab representative countered by saying it was a ride-hailing app.

To substantiate the argument, Van said Grab had directly managed routes, directed drivers and decided service costs.

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.

Customers who pay for their fare via credit cards pay directly into Grab’s bank account. “The payment shows that customers are paying for a transport service, not for hiring an app,” the lawyer added.

Another legal representative for Vinasun also claimed that Grab had violated the tax law. According to data from the General Tax Department quoted by the representative, Grab paid VND9.5 billion in tax between 2014 and 2016. The figure is equal to just one-thirtieth of the amount Vinasun paid in the same period, but Grab was operating six times as many cars.

Vinasun claimed that Grab had violated the country's urban transport plans, causing losses to local taxi firms and the state budget. In HCMC, for example, the transport plan for 2020 was to have 12,500 taxis operating in the city, but with the expansion of ride-hailing firms such as Grab, there are already 27,000 cars offering taxi services in the southern metropolis.   

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.

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.

Ride-hailing services will have to register their businesses with investment authorities, the transport ministry and tax authorities.

“Tax agencies will keep track of fares so management can be more transparent,” said Tran Bao Ngoc, director of the ministry's Transport Department.

Hanoi has also recently put up traffic signs banning Uber and Grab cars from operating on roads off-limits to traditional taxis.