Uber’s ride hailing service is finally legal in Vietnam
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The ride-hailing firm has now secured approval from local authorities after two previous rejections. The Vietnamese government has finally approved Uber’s application to trial its ride hailing services, a minister said, after having rejected requests from the company twice since 2015.
Deputy Transport Minister Nguyen Hong Truong said on Monday that Uber Vietnam has fulfilled all necessary conditions to pilot its online ride-hailing application. However, the company will still need approval from local authorities before it starts operating, Truong added.
The main obstacle facing Uber’s quest to legally offer its services in Vietnam was mainly its failure to register Uber Vietnam as a ride service provider since its arrival in June 2014 as the company expanded into Southeast Asia.
Previously, Uber Vietnam was only registered to offer “consulting and management” and “market research and public opinion polling”. Now, it’s also registered to offer “information technology services and other computer related services.”
The Transport Ministry previously said that Uber Vietnam’s authorization given by its parent company – the Netherlands-based Uber International Holding BV – which provides the smartphone application for Uber services, was insufficient.
Market regulators said the parent company should be held responsible for the application rather than its Vietnamese business unit.
Local regulators outlawed Uber’s smartphone app-based services in November 2015 after they flagged the company for tax avoidance.
In an attempt to regulate ride-sharing services, Vietnamese regulators have allowed companies to run pilot programs through IT applications under 3-year contracts. Vietnam’s transport authorities earlier approved a pilot scheme for Grab Vietnam, Uber’s main rival, that also entered Vietnam in 2014.
The Malaysia-based Grab was previously the only foreign-run transport service allowed to operate in five cities across Vietnam using registered private vehicles between 2016 and 2018.
Questions & Answers
Q.Why did Uber face difficulties in gaining legal approval for its ride-hailing services in Vietnam?
Why did Uber face difficulties in gaining legal approval for its ride-hailing services in Vietnam?
The main obstacle was Uber's failure to register Uber Vietnam as a ride service provider since its arrival. Previously, it was only registered for consulting, management, market research, and public opinion polling, not for transport services.
Q.What kind of business activities is Uber Vietnam now registered for, in addition to its previous registrations?
What kind of business activities is Uber Vietnam now registered for, in addition to its previous registrations?
Uber Vietnam is now also registered to offer 'information technology services and other computer related services'. This registration is a change from its prior focus on consulting and market research.
Q.What was the Transport Ministry's concern regarding Uber's parent company and its Vietnamese unit?
What was the Transport Ministry's concern regarding Uber's parent company and its Vietnamese unit?
The Ministry believed that the authorisation from the Netherlands-based Uber International Holding BV was insufficient. Market regulators felt the parent company, rather than the Vietnamese business unit, should be held responsible for the application.
Q.Has another foreign ride-hailing company already received approval for a pilot scheme in Vietnam?
Has another foreign ride-hailing company already received approval for a pilot scheme in Vietnam?
Yes, Vietnam's transport authorities previously approved a pilot scheme for Grab Vietnam, Uber's main rival. Grab, based in Malaysia, was the only foreign-run transport service allowed to operate between 2016 and 2018.
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