On Saturday it had said everyone out on the streets has to fill in a travel declaration form at suckhoe.dancuquocgia.gov.vn.
Created by the Ministry of Public Security to manage people in Covid hotspots, and linked to the national population database, it recorded information about everyone entering and leaving epidemic areas to enable the tracing of people coming into close contact with patients.
Commuters had to scan a QR code at the checkpoints to enter the declaration website.
But the city police announced on Sunday that the requirement would no longer apply inside the city but only at gateways to control people going in and out of town.
Lieutenant Colonel Nguyen Van Khoi, head of the Go Vap District traffic police, said officers at checkpoints had gone back to checking papers to ensure people are not breaching social distancing measures.
The same removal had also been applied in districts 7 and Binh Thanh on Sunday afternoon, even before the city police announced to scrap the rule.
Most people had not been aware of the new requirement or did not have smartphones or mobile data.
In other cases they did not know how to use the application or claimed they had filled in all the information but the app did not work.
Officers had to use their phones to check the information declared by commuters, and so many ran out of battery or ran out of data.
All this resulted in messy situations at checkpoints and severe traffic jams across the city, especially on Sunday.
Since May HCMC has been suffering from the fourth wave of Covid, and is the worst-hit locality in the country with 149,286 cases and 4,597 deaths as of Sunday.
The city of 13 million on Sunday extended social distancing under Directive 16 by another month until September 15 after already completing a month.
It requires people to stay home and only go out for necessities like buying food or medicines or to work at factories or businesses allowed to operate.
On the street, people must furnish papers to show they are not violating the provisions.