The Ministry of Transport has suspended the operations of two taxi firms during spot-checks on four companies in Hanoi.

The Mua Xuan and Phu Gia taxi firms had been suspended from operation said ministry Chief Inspector Nguyen Xuan Hao.

The Phu Gia Taxi under the Phu Gia Transport Service Company claimed a fleet of registered 14 cars, but inspections revealed that the company had only four dedicated cars, with remaining ten drivers having to pay the Phu Gia Company VND800,000 (USD38.2) per month to use their brandname.

Hanoi police recently arrested a Phu Gia taxi driver after he overcharged two Singaporean passengers who had visited the capital for the 80th Interpol General Assembly meeting. He forced them to pay USD200 (around VND4.3 million) and SGD100 (around VND1.6 million) for travelling just 10 km.

“Mua Xuan Taxi has only five cars, yet it received an operational license. I have no idea how they claim they are capable of making a profit,” Hao said.

Thanh Nga Taxi has 622 cars but employs just 700 drivers. This shortfall means that drivers are racking up huge hours and contravening safe driving limits.

According to the Hanoi Transport Department, the city has 114 taxi companies with a total 16,000 cars. Of which, up to 43% have less than 50 cars. Thousands of unlicensed taxis are still operate without municipal approval. Ho Chi Minh City by comparison has a mere 36 taxi firms, providing 15,000 cars in total.

According to Nguyen Xuan Hao, there is a lack of regulation on the number of licenses being issued to taxi firms. “Besides tightening control over taxi companies, we will propose setting stricter regulations.

A large number of taxi businesses have been licensed, but authorities have not yet paid enough attention to their operations. Many drivers are in effect freelance drivers operating under a taxi company franchise.

With little oversight, overcharging, parking violations and confrontational disputes with other taxi drivers and passengers are common place.

Hanoi authorities have suspended the operations of six taxi companies in the last three years but the ministry’s inspection indicated that the local taxi business environment remains problematic.

The ministry started the first-stage inspection on taxi firms in Ho Chi Minh City on November 21, and would investigate the operations of Mai Linh, Vinataxi, Vinasun, Petrolimex, Duc Linh, Hoang Long, Phuong Tranh and Minh Duc companies.

This is the first time that the ministry has investigated taxi companies in the country’s largest cities.