Uber hits back at Vietnam’s plan to treat it like taxi firm

Ride-hailing company Uber has followed in Grab's tracks by expressing its objections to Vietnam’s plan to increase control over its operations, a bone of contention that has caused disputes with traditional taxi firms over the past few years.

Last week, Minister of Transport Nguyen Van The said 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 a representative from Uber Vietnam urged the government to consider the positive effects that ride-hailing firms bring to the economy.

“We believe that the constructive road ahead for Vietnam is to remove the regulatory burden on the passenger transport industry, not to impose new and unnecessary rules that are currently levied on traditional taxis on new models like us,” the representative said.

Uber said it is a tech firm, not a taxi or transport company.

“Uber does not own cars, and we do not employ drivers. Uber only owns software that helps connect transportation firms and passengers. Transport service providers can use Uber’s apps and technology to increase connections between drivers and passengers, raising business effectiveness,” the representative said in a statement.

Denying that Uber and Grab had contributed to increased traffic congestion in Vietnam, Uber said that congestion is caused by all sorts of vehicles.

Ride-hailing apps have even helped reduce the number of private cars, the statement said.

“We think that treating Uber like a taxi or transport firm is not the solution to these issues, and will have negative consequences,” Uber affirmed.

Earlier, Grab said that this 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.

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.

Minister of Transport Nguyen Van The said the number of cars using Uber and Grab apps has increased to 38,000-40,000 in Vietnam over the past 2-3 years.

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.