Transport Ministry rejects Uber Vietnam proposal

The Transport Ministry has declined to approve a Uber Vietnam request to pilot an IT upgrade for its services, citing, among other things, a lack of authorisation and validation from its parent firm. In an indication of regulatory obstacles that stand in the way of companies using ridesharing apps that people can use to hire transportation in major cities around the world, the ministry said Uber Vietnam had not met several conditions for regularising its operations in the country.

A similar application by Uber’s rival, GrabCar, has been approved.

An official document sent to the company by the ministry said the authorisation given to Uber Vietnam by Holland-based Uber International Holding BV (Uber BV), which provides the smartphone application for Uber services, was insufficient.

It said Uber Vietnam was presenting itself as the developer and applicant of the test launch with Uber BV having no legally binding responsibility in project implementation.

Furthermore, the registered fields of operation in Uber Vietnam’s initial business certification are “managerial activities” and “market research”, that has no relation to any action authorised by Uber BV.

If Uber Vietnam is developer of the IT component and wants to apply it, it has to add this activity to its list of registered operations, according to the Ministry.

Also, as the party directly responsible for signing and implementing the project, Uber Vietnam should work with other commercial transportation units and provide these and their direct clients (drivers) with the necessary contracts.

The ministry also said that under the nation’s e-commerce laws, the Uber mobile application has the same function as an electronic exchange. Therefore, the company needs to register its services with the Ministry of Industry and Trade.

Regarding Uber Vietnam’s use of electronic contracts and data instead of traditional paper contracts, the ministry demanded more details and analysis on the content and process before approving the project.

In particular, the pilot project must clarify Uber’s rights and responsibilities as a supplier of technological applications and transportation services. This includes the authorisation given by Uber BV to Uber Vietnam, as also the resolution of any legal issues that arise during the latter’s operations.

The ministry’s communiqué said it could not approve Uber Vietnam’s request before the company satisfies all the conditions mentioned therein. It said this was required so that the company would not continue working with vehicle owners and other transportation units in contravention of regulations.

The project under which Uber has sought approval is officially titled “Application of information technology in supporting the management and connection of commercial passenger transportation by contract.”

The project’s stated aim is to enhance State management of information technology-based passenger transportation, and create preconditions for future science and technology application projects in the transportation sector.

Uber entered Vietnam in June 2014 as a foreign company operating in the country without resident offices. The company has undergone previous scrutiny by the Government on matters of tax avoidance and its legality in the country.