Is Uber Running Illegally in Vietnam?

After Uber’s unfortunate reaction to an anti-Trump taxi strike in New York some two weeks ago, which caused considerable damage to their reputation all over the US, the company is now – and has been since they entered Vietnam in June 2014 – facing serious problems with local transport authorities.

Recently, fares for both Uber and Grab have exploded during peak hours (rush hour, rainy weather, early morning, late evening), which at times makes the car options more expensive than regular taxis. In addition to this, Uber Vietnam searched for investments and hired drivers without owning the necessary local permits to do so, reported Nguyen Tuan Sinh, representative of the Mai Linh Group; he urged Vietnamese authorities to keep an eye on these activities.

Operating Without Legal Permission

While Malaysia-based Grab completed all the legal hurdles that were needed to become the only foreign transport service officially granted permission to operate in Vietnam until 2018, Netherlands-based Uber B.V. is still not recognised as an independent legal entity in Vietnam. The company’s Vietnam unit is legalised only in the business fields of management consulting and market research.

Grab vs über

Without official registration, Uber is not bound to transport regulations, as stated in the government decree on the business condition for automobile transportation. This means that the parent company, Uber B.V., can not be held legally responsible for the actions or customer complaints generated through the use of their app.

On these grounds, the Vietnamese Ministry of Transport has denied approval of a pilot project application of Uber’s, following its earlier Decision No. 24/QD-BGTVT that regulates the application of information technology to the management of passenger transportation. However, a similar project introduced by Grab was approved.

The ministry has now ordered Uber to enlist for the field it is actually operating in – licensed ride services – or else to stop providing this service altogether. A report on VnExpress.net even declares, “The company is running illegally in an alleged attempt to avoid paying tax.”

In view of the sheer number of clients using Uber daily thanks to its accessibility and comparatively low fares, a ban of Uber bikes and cars from Vietnam’s streets would have a huge impact on transport in urban areas. This would give Grab a virtual monopoly in the transport app market.

Updated: March 27, 2017
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