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Is Uber taxi service in Vietnam illegal?

While Uber, an American taxi app service that offers low fares, expensive vehicles and gives passengers the feeling of riding in their own lavish cars, has recently launched its service in Hanoi, it has met with dubiety and protest from taxi operators, relevant agencies and clients in Ho Chi Minh City regarding its legitimacy, competition and clients’ safety.

A seven-seat Uber car arrives shortly after a client makes an order on her smartphone.
A seven-seat Uber car arrives shortly after a client makes an order on her smartphone.

Since June 2014, local and foreign passengers in HCMC have enjoyed the luxury and convenience which Uber’s luxury cars have brought.

The service offers lower fares than local taxi operators and great convenience, as it only takes a few swipes on a smartphone for clients to start up their Uber app, pick a car, and select the location where they wish to be picked up.

The app instantly tells them that a car with a specified license plate will arrive in 10-15 minutes. A photo of the driver is also provided.

All a client has to do now is to wait for the car to arrive. They can also track the car on their phone.

Uber cars have no markings on the outside to show that they are rented.

Where’s the license?

Despite Uber’s undeniable benefits, its clients remain concerned about its legitimacy, drivers’ qualifications and safety issues, while taxi operators have voiced their protest regarding its assumed unfair competition, and relevant agencies including   transport and public security are baffled at how to deal with it.

Ta Long Hy, CEO of Vinasun, a major Vietnamese taxi operator, and chair of the HCMC Taxi Association, told Tuoi Tre (Youth) newspaper that Uber’s operation in the city so far is illegal, as it mostly uses non-business, individually-owned cars, and offers unhealthily low fares as it doesn’t pay any tax.

“Uber is drawing more and more clients, which means hurting the local taxi operators’ business and jeopardizing several thousands of taxi drivers’ livelihood,” Hy noted.

He added prior to the presence of Uber’s service, two similar services called Easy Taxi and Grab Taxi had also been launched.
These two services can be applied in taxi businesses, while Uber’s service can’t, Hy stressed.

The HCMC Taxi Association has petitioned to several relevant agencies for solutions and has received positive feedback.

Duong Hong Thanh, vice director of the HCMC Department of Transport, urged that the Ministry of Transport better handle the novel service.

Representatives of the HCMC Tax Department told a recent meeting between relevant agencies that Uber’s operation is illegal, as all its clients’ payments are made via international cards, and Uber and its cars’ owners don’t register for business operations or don’t perform tax registration or payment.

However, there’s little the tax department can do as Uber is based in the US and all its payments are made via accounts in other countries.

Even when the accounts are identified, the department is still unlikely to collect tax from Uber as it has no way to work out the company’s revenues, they stressed.

Meanwhile, the Department of Information and Communication said it can use technical approaches to stall Uber’s service, pending the approval from the Ministry of Information and Communication.

Representatives of the local police raised concerns regarding the identity of the cars’ owners, drivers’ training and qualifications and clients’ safety, including robberies staged by the drivers themselves.

Likewise, lawyer Nguyen Huu The Trach urged that Uber’s operation be put under the control of Law on Enterprises, which stipulates that the company has good management of its drivers and is liable towards clients.

Clients’ concerns

Tran Minh Quang, of HCMC’s Go Vap District, said he enthusiastically embraces Uber’s service for its low fares and drivers’ good manners.

For example, it took him only VND42,000 (US$2) in a Uber car from District 3’s Con Rua (Lake) roundabout to Phu Nhuan District’s Ga Market, while a taxi ride costs him some VND60,000 on the same route.

“However, I’m quite concerned about Uber’s legitimacy, as its cars bear no markings or logos. I myself and even drivers don’t know if the service is lawfully registered,” Quang said.

He also raises questions on who will be responsible in case of passengers’ forgotten property in the cars and drivers’ refusal to cooperate.

“I think authorities should control the service more strictly and efficiently. We passengers want rides which are not only cheap and convenient but also safe,” he stressed.

Meanwhile, T.- a new driver for Uber- said that he and other drivers work for Uber via a local transport company.

He said that apart from the low fares,  convenience and lavish rides which the service offers, clients don’t need to offer drivers tips and are also welcome to comment on the drivers’ manners.

Those with negative client comments are likely to lose their jobs, T. added.

He added that, after dropping a passenger, he usually stays in the area, waiting for calls from new passengers instead of searching for new ones as taxi drivers generally do.

“However, I’m quite worried about how to react to traffic police if I’m pulled over for some violations, as the cars are individually-owned and aren’t registered for passenger transport,” T. added.

Dr. Nguyen Duc Thanh, of University of Economics and Business, urged that Uber service not be banned, as the ban would be a restriction on enterprise rights, and clients’ use of new apps on their smartphones.

Thanh called for better management of the new service instead.

Meanwhile, Mike Brown, – Uber’s regional general manager in Southeast Asia- maintained that Uber does not possess, operate any means of transport or hire any drivers.

“Instead, Uber is providing a free transaction, which guarantees drivers and clients safe rides. Each of our partners earns their own profits. Uber only creates opportunities for drivers to earn additional incomes,” he confirmed.

Brown asserted that his company has complied with all current tax laws and made full tax payments in any country where their service is launched.

He also underlined that Uber’s service is strictly obedient of the countries’ transport laws and is recognized by relevant agencies there