Authorities blame Uber and Grab for congestion
  • | | April 14, 2017 03:17 PM
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Hanoi and HCM City authorities have asked to tighten management over Uber and Grab operations as they claim the services are causing congestion and affecting traffic planning.


Uber and Grab are popular in Vietnam

The problem was discussed at a review conference about combining technology with transportation held by the Ministry of Transport on April 13. Uber and Grab were accused of causing congestion, not following the traffic planning and being opaque in terms of their tax duties.

According to Hanoi Department of Transport, Hanoi has over 4,000 vehicles participating in the services. "The growth rate is too fast. We can't manage the logo, number of vehicles or whether they have e-contracts with other vehicles owners," said the representative.

In addition, they expressed worry over the quality of drivers and the fact that the service providers refuse to be responsible for passengers in case there are trouble. These providers entered Vietnam since 2014 but haven't registered as transport business or support services. As the number of drivers signing e-contracts with them rise, the number of vehicles in Hanoi rises and leads to congestion, a representative claimed.

The Hanoi Department of Transport suggested halting the expansion of the car fleet with e-contracts in 2017 for further review.

Nguyen Ngoc Giao from HCM City Department of Transport also agreed. "In late 2015, HCM City had 200 to 300 cars with long-distance contracts but as of early April, the number is 22,000. We want to stop issuing licenses to cars with less than nine seats, as part of a better management plan," he said. "We can't make traffic planning with those contracted cars."

Vice Director of Vinasun Taxi Company Truong Dinh Quy claimed that Uber and Grab were causing difficulties to taxi firms. In the first three months, nearly 5,000 drivers quit. Their salaries were reduced from VND9m (USD397) to VND5m a month as Uber and Grab often offers zero VND promotion campaigns. Meanwhile, taxi firms have to ask for permission from the authorities if they want to start any discount programme.

Nguyen Van Thanh, president of Vietnam Automobile Transport Association, said Vietnam couldn't ban Uber and Grab. The authorities should classify their services to help with tax collection.

"They are popular with the public. Taxi firms are lagging behind and suffer losses and we should fix this," he said.

The representative of Grab countered that they had paid all taxes and 80% of their cars always had passengers so they didn't affect the traffic flow. They also offer carpool service to help passengers save money and reduce the number of cars on the streets.

However, Nguyen Van Dan from Khanh Hoa Province Department of Transport said most of the cars under Uber and Grab are private vehicles and hide under supporting services. This was described as ‘a hole’ in the management system. "We are imposing strict management over taxi firms but very lax over contracted vehicles. The laws must be fair," he said.

Vice Minister of Transport Nguyen Hong Truong said they must think of suitable solutions instead of imposing unreasonable bans. Uber and Grab have proved popular with the public. He supported applying technology in transportation but required firms to be transparent.

Statistics from the Ministry of Transport show that since January 2016, about six firms and three software providers have submitted their software and technology to participate in the pilot programme to combine technology with transportation. 13,534 have joined the programme.

After Grab, Uber's pilot e-cab project will be approved.

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