Duong Quoc Trung, a member of Vietnam National Assembly, has recently questioned PM Nguyen Xuan Phuc about the rising competition between Uber, Grab Viet Nam and conventional taxi firms and its consequences.
In his response, PM Nguyen Xuan Phuc admitted that the technology based platform that Uber and Grab are applying has a massive impact on the conventional taxi services.
However, he believed that the development is inevitable and brings lots of benefits to the people. PM reaffirmed that the government will further apply advances in technology to transportation.
Last month, Hanoi, Danang and HCMC’s taxi associations sent a joint petition to PM Nguyen Xuan Phuc, requesting his intervention for a more equal business environment.
They claimed that Uber and Grab are receiving preferential tax policies. The associations also accused these two companies of violating the laws requiring taxi cars to have a badge, logo and meter.
Besides, with various promotions, Uber and Grab are taking a large market share from conventional taxi companies, causing the unfair competition, according to the taxi associations.
In this regard, Do Thang Hai, Deputy Minister of Industry and Trade, said that providing promotions does not imply violation of laws. A representative from Finance Ministry also denied that these two companies are treated favorably in terms of tax. General Department of Taxation is investigating all cases risky of tax evasion.
Back in 2016, the government launched its pilot project testing Uber and Grab apps usage feasibility in five major cities in Viet Nam. Since then, these apps on smart phone to order taxi have become dominant wherever they are available. Uber and Grab are posing a big threat to conventional taxi firms.
Vinasun, the biggest taxi firm in the south, has recently announced to cut down on their staff by 8,000 employees. Its revenue declined by 80% only in the second quarter of 2017, compared to the same period last year. The company blames Uber and Grab for its dramatic loss.
Another big player, Mai Linh Group, revealed in April that its profit reached its lowest point in the past five years, also blaming Uber and Grab for the fall.