Minister of Transport tells Hanoi and Ho Chi Minh Transport Associations that Uber is an IT business and outside its control.
The Minister of Transport has sent a document to the Hanoi and Ho Chi Minh Transport Associations clarifying the operations of the app-based transportation network Uber.
The document states that the Ministry of Transport (MoT) does not manage Uber’s services because the company conducts business as an information technology enterprise.
“The document is in answer to our proposal sent to MoT for it to halt Uber’s operations in Vietnam,” Mr. Bui Danh Lien, Chairman of the Hanoi Transport Association (HTA), said. The proposal was sent on December 4. A similar document was also forwarded to the Ho Chi Minh Transport Association.
The MoT document also stated that if Uber wished to cooperate with taxi companies it must respect Vietnamese law, and this means obtaining a business license.
Despite not being responsible for managing Uber, the ministry still can exert control via sudden inspections and fining illegal taxis, under Decree No.171.
Prior to receiving the MoT response, HTA was contacted by a person claiming to be a representative of Uber, who proposed a cooperative effort with the Association. Mr. Lien, however, declined the offer, citing several reasons, including the fact that Uber doesn’t have responsibility for protecting its customers. Uber also doesn’t create any value-added when doing business in Vietnam, he said, but took a 20 per cent commission for connecting taxis with customers.
In an effort by the State to manage the new app in Vietnam, the General Department of Taxation recently proposed taxing Uber at 10 per cent of its total revenue if were to be legalized in Vietnam.
Uber in Vietnam
- July, 2014: Uber officially appears in Ho Chi Minh City
- December 1: Uber considered an illegal business, Deputy Minister of Transport Nguyen Hong Truong tells a press conference
- December 2: Minister of Transport voices support for Uber
- December 12: Uber appears in Hanoi
- December 20: HTA rejects Uber offer of cooperation
- December 22: Uber representative meets Minister of Transport and is asked to cooperate with taxi companies having a business license.
- January 2015: Taxis are inspected by MoT inspectors to check whether taxi has business license to use Uber app