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Home / Economy / Trade - Service
Vietnam to review Uber and Grab’s legal status
Ngoc Thuy 09:28, 2018/01/04
The Minister of Transport recently requested the Directorate for Roads of Vietnam to take the decision by the European Court into consideration when managing Grab and Uber’s operations in Vietnam.
As the European Court of Justice has ruled that Uber should be regulated as a transportation company, the Minister of Transport Nguyen Van The said at a meeting with the Directorate for Roads of Vietnam on January 1 that competent authority should refer to this ruling when managing Grab and Uber to ensure fair competition with other traditional taxi companies. 
 
The presences of Grab and Uber have been controversial around the world.
The presences of Grab and Uber have been controversial around the world.
According to the minister, the management of Uber and Grab remains controversial worldwide. However, with the above decision, Uber could now be subjected to stricter requirements that apply to traditional taxi companies. This is contradictory to the company’s previous statement that it should be treated as technology service that connects drivers and riders. “The Directorate for Roads of Vietnam should propose solutions to manage Uber and Grab in conformity with the law and ensure a healthy business environment” – The said. 

The Minister also raised the issue of Uber reporting losses, but whether this is an attempt to avoid paying taxes remains ambiguous: “Is this the case of unfair competition that Uber has been exploiting its advantages over traditional taxi companies to gain share in the taxi transport market?” For Uber to continue operating in Vietnam, the company should comply with the law and should not be permitted to use foreign capital on promotion and advertisement to create unfair competition with traditional taxi companies. Therefore, the sooner the better for Vietnam to quickly identify the legal nature of Grab and Uber for better managing these companies’ operation. 

Previously, Vinasun, a local taxi company complained to the Ministry of Transport that Uber and Grab’s operations in Vietnam had been violating tax obligations. Thus, Uber and Grab should be regulated as normal taxi companies. As such, from 2014 to 2016, while Vinasun had to pay taxes up to 1,2 trillion VND (52.8 million USD), Grab only paid 9.5 billion VND (418,000 USD). Clearly, there are a striking difference when both companies operate in a same market and serve a same type of passengers, but Vinasun has to pay tax amount 130 times higher than that of Grab. 

On the other hand, the director of Grab Vietnam Jerry Jim maintained the company’s stance that Uber is a technology company and does not own any means of transport. What they do is to cooperate with transportation service providers to utilize their registered idle cars. 
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