Ride-hailing services drive out of control in Vietnam

By Thuy Vi   October 13, 2016 | 04:44 pm GMT+7
Ride-hailing services drive out of control in Vietnam
Malaysia-based Grab has been in partnership with Vietnam's government to provide ride-hailing service. Photo by Grab Vietnam
The government has licensed the Grab service, but unregistered rivals like Uber are pulling away.

Nine months after partnering with the mobile transport app Grab, Vietnam’s transport officials have admitted that other similar services are running beyond their control.

The Ministry of Transport licensed Grab in January, before it approved the country’s leading taxi company Vinasun to try its own app in June, and a Hanoi-based transport firm last month.

A ministry report at a meeting held on Thursday said the service has served millions of rides and provided passengers more control, allowing them to evaluate and keep track of the drivers.

The Malaysia-based company, which has just received ISO certificates for operations in six countries in Southeast Asia, has plans to expand to Da Nang, Vietnam’s third largest city.

Vinasun, which is running 200 cars with the booking app, said these cars are 10 percent busier than its normal taxis.

However, both companies have expressed frustration that they are still stuck in “unhealthy competition” with unlicensed services, like Uber.

Uber proposed a legal framework for providing ride-hailing services in Vietnam in October last year, but the proposal was rejected as the company did not designate a legal entity that would handle contracts with its Vietnamese partners.

The Transport Ministry then asked Uber to revise its proposal, but no further action has been taken since.

Ta Long Hy, director of Vinasun, said at the meeting that illegal services like Uber are “causing chaos to the market and should be destroyed”.

Transport officials from Hanoi, Khanh Hoa Province in central Vietnam and Dong Nai Province outside HCMC all admitted that there are other unregistered ride-hailing apps operating in their areas.

Nguyen Van Dan, deputy director of Khanh Hoa’s Transport Department, said insiders are “super confused” about how to manage ride-hailing services.

Officials said there is basically no legal framework to manage ride-hailing apps in Vietnam, and although officials can easily expose a driver from an unregistered app by pretending to book him/her, there is almost no way to punish them.

As a convenient service, ride-hailing apps are likely to become more popular and the government should work out measures to control them, and to at least impose limits on the number of cars and areas using the services, they said. Otherwise, the traffic will become out of control.

Huynh Thanh Phong, deputy chief traffic police officer in Ho Chi Minh City, said traffic in the city has worsened recently, and ride-hailing services have played a part.

He said 60,000 cars under nine seats were registered in the city in the first nine months, up 30 percent from a year ago, which translates as more than 220 new cars every day.

He added he was positive that a number of those cars have been used as taxis.

Congestion in the city, the country’s most crowded with 12 million people, has become serious since September, Phong said.

“The traffic used to be heavy until 9 a.m.; now it is heavy any time of day, even at noon or 10 at night.”

Related news:

Ride-hailing app Grab plans $1 bln push with long-term plans for Vietnam

Vietnam's Vinasun launches ride-hailing app to compete with Uber, Grab

For the first time, Uber pays tax in Vietnam

 
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