Don’t treat ride-hailing firms as taxis, Vietnam government advised

Nguyen Dinh Cung, director of the Central Institute of Economic Management (CIEM), criticized state agencies for a “managing mindset” that “is not yet innovated”.

Cung was referring to the latest draft decree on transportation management, which asks ride-hailing firms like Grab, Fastgo and Vietgo to comply with many conditions that are applied to normal transportation businesses like taxi companies.

He said firms that primarily used software cannot be called a transportation business and said the new move was not consistent with the country’s stated aim of removing at least 50 percent of current business conditions.

Cung told VnExpress that the state managers must also think in terms of the market from the perspective of facilitating new technologies and business models instead of using administrative procedures to intervene in their business.

While the latest draft has cut many conditions for the ride-hailing business, such as logos, paint colors, board signs, an operating center, communication equipment and uniforms for drivers, Cung said there were still several negative conditions.

For instance, the draft decree requires ride-hailing firms to send their transport contract information to the Transport Department before providing their service.

It also requires that ride-hailing firms have a team to manage and monitor traffic safety issues.

Cung said such conditions were meant to give authorities more room to intervene in the operations of the ride-hailing firms.

He has recommended to the Government Office that the draft is not approved and instead, the state tries to encourage new investment forms or business models with an open and fair environment in keeping with Industry 4.0 trends.

Even if they don’t want to encourage the new technology-based business yet, the laws should not do away with such business models with irrelevant, old conditions, he told VnExpress.

Prepared by the Ministry of Transport to replace the Decree 86/2014 on managing automobile transportation businesses, the fifth edition of the draft has been released for public feedback.

The tussle between ride-hailing cars and traditional taxis has not cooled after the exit of Uber from the Southeast Asian market in March. Taxi firms have continued to complain about the unfair competition they are facing.

They have also joined hands to fight the market onslaught of ride-hailing firms.

The ride-hailing market has seen new entrants after Uber’s departure, including Aber, Fastgo and GoViet, which is an affiliate of Indonesia’s Gojek.

Current market dominator Grab has expanded its service to include GrabFood and GrabCar Business, the latter targeting the corporate sector. These moves pose further challenges for long-standing taxi firms like Mai Linh, Taxi Group and Vinasun.