Hanoi (VNA) - The Ministry of Transport (MoT) and the General Department of Vietnam Roads arecurrently planning amendments to Decree 86 issued in 2014, focusing on businesscondition reviews for transport firms.

Tran Bao Ngoc, Director of the ministry’s Transportation Department, said in anearly March meeting that the new decree’s main objective was to better managetransport businesses using software.

The move comes after a February announcement from the Hanoi Department ofTransportation, stating that Uber and Grab must cease employing new drivers,and “temper operations” until a definite administrative framework wasconstructed.

The MoT’s actions were welcomed by national taxi associations of Hanoi, HCMCity and Da Nang, claiming on their official site on March 16 that with thetwo-year pilot period ending in January 2018, the ministry’s prolongedtolerance towards Uber and Grab is a step backward for the sector.

According to the associations, the pilot phase had run too long, and if theride-hailing firms continue operation, it would mean increasing uncontrolledtraffic jams and mismanagement of urban planning and transportation operations.

Worse, all three agreed that the MoT had indulged their rival firms, lettingthem print and distribute their own logos, unlike other taxi firms.

Minister of Transport Nguyen Van The was eager to see the new draft takingshape.

As stated on the MoT’s online portal, The confirmed that despite the two firms’listing themselves as software application businesses, the nature of theiroperation was akin to regular taxis on an electronic platform.

Regulations are needed for the firms to operate on Vietnamese territory inaccordance with Vietnam’s law and World Trade Organisation regulations, saidthe minister.

The MoT and the Vietnamese Government do not object to technology, but when itcomes to doing business in Vietnam, both Uber and Grab must comply with thecountry’s law on transportation, he said.

He added that Vietnamese authorities did not wish to hinder business but toensure safety and efficiency for drivers and passengers alike.

Khuat Viet Hùng, Vice Chairman of the National Committee of Traffic Safety,told the MoT last week that at the moment, a proposal to stop increasing thenumber of Grab and Uber vehicles would be the most effective managementsolution.

Hung affirmed that since Vietnam’s law stipulated that only transport serviceprofessionals can collect fares from passengers, once Uber and Grab driversprofit from their transport services, they are effectively transport firms.

By acting as though they were simply technology companies, the two firms havebeen violating the law, he added.

On the other hand, Nguyen Dinh Cung, Director of the Central Institute forEconomic Management, said the new draft was inconsistent, with many businessbarriers and a lack of clarity as to which Government agencies would be incharge of overseeing ride-hailing firms.

During an interview last week with the MoT, Cung said that the ministry wasveering towards old, bureaucratic thinking via administrative interference inbusiness, and a lack of market solutions to address the problem.

He said the draft mislabelled the term ‘contract vehicle,’ and had noclear management objectives, citing “pointless” provisions such as how a tripwith the same departure and arrival point cannot make up more than 30 percentof a driver’s trips in a month.

Cung accused State agencies of interfering too much in the contractualrelationship between businesses and drivers. 

He suggested the State focus fair competition, and instead buildan effective, reliable court or dispute settlement mechanism.

Meanwhile, Grab is finalising its acquisition of Uber’s business in SoutheastAsia, according to news site Bloomberg, buying the latter’s operations incertain markets in exchange for a stake in Grab.

This may signal Uber’s move to clean up its finance in preparations for a 2019initial public offering, as pulling out of seemingly ineffective markets likeSoutheast Asia would be a profit boost against accumulated losses of 10.7billion USD.-VNA