Ride-hailing rule concerns persist

Heated debate is continuing around the proposal to regulate ride-hailing firms as taxi companies, due to concerns that it will dampen Vietnam’s Industry 4.0 efforts.

Ride-hailing rule concerns persist

Experts see continued expansion of ride-hailing services thanks to their convenience

Speaking at a meeting with the executives of leading global firms on the sidelines of the World Economic Forum in Davos in January, Prime Minister Nguyen Xuan Phuc said that Vietnam aims to develop a legal framework that will accommodate the new technologies of Industry 4.0 and accelerate public-private partnership to create environmentally friendly breakthrough products and services.

“Industry 4.0 is knocking on the doors of every single enterprise, bringing about radical changes. Vietnam considers it a big opportunity when countries compete through innovation in addition to traditional means like trade liberalisation, scale, experience, labour, and capital,” the prime minister added.

In this spirit, Vietnam has become an emerging market for several disruptive firms. Ride-hailing firms like Grab, Go-Viet, FastGo, and Be have taken the country by storm with their services, bringing
tremendous benefits to both customers and drivers.

However, the Ministry of Transport (MoT) is proposing to step up regulation of ride-hailing companies, aligning service firms with taxi operators. The proposed change has ignited the debate about how
street-hailing and ride-hailing services should be managed.

The MoT recently submitted to the government the latest draft replacing Decree No.86/2014/ND-CP on business conditions for automobile transportation. Accordingly, the MoT maintains its proposal that
electronic-contract-based vehicles using ride-hailing platforms like Grab, Go-Viet or Be must install taxi signs on the top of the vehicles – sending many wondering about the future of disruptive business
models in Vietnam.

Nguyen Van Hau, chairman of the Ho Chi Minh City Bar Association, said, “The sharing economy is about the sharing of idle assets. Ride-hailing platforms under the model have generated employment and
income for many people. It is clear that the proposed rule will increase unnecessary procedures and lead to the loss of jobs.”

 

Hau went on to say that customers will be harmed by the loss of competition, which will likely translate into higher prices, longer waiting times, and lower quality ride-hailing services.

Truong Thanh Duc, lawyer at BASICO law firm, said that Vietnam and some other countries are confused whether to classify ride-hailing apps as taxi firms or Internet-based service providers. “Their business
model is unique, so I think the government should use technology to regulate or tax them. This reflects the nature of these firms and would prevent double taxation or tax evasion,” said Duc.

He added that despite their ambiguous legal status, ride-hailing apps should be allowed to operate in Vietnam as they benefit consumers, the economy, and push Vietnam towards Industry 4.0. “We should
encourage new innovations in Vietnam’s transport system,” Duc emphasised.

Kenneth Atkinson, executive chairman of Grant Thornton, told VIR that ride-hailing services should be properly regulated and taxed. “The regulatory environment is the only possible risk to ride-hailing apps in
Vietnam. I can only see continued expansion because of the growing popularity and the mindset of Vietnamese millennials, together with the growing acceptance and convenience for ride-hailing services.”

If the MoT’s regulation becomes effective, investors may be concerned about their decision to invest in the country. Meanwhile, consumers could lose the chance to benefit from modern and convenient
services brought by technological advances.

With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership already in effect and the EU-Vietnam Free Trade Agreement expected to be ­ratified this year, Vietnam is required to make
greater ­efforts to ensure full ­compliance.

Among them, there are regulations to limit the government’s intervention in e-commerce activities like ride-hailers. Before proposed rules can come into force, legislators will need to make careful
considerations to ensure it falls in line with Vietnam’s FTA commitments and does not stunt the country’s efforts to embrace new ­technology in Industry 4.0. VIR

 
 

Other News

.
Tax policies for property sector must be carefully studied: finance ministry
Tax policies for property sector must be carefully studied: finance ministry
BUSINESSicon  06/05/2021 

Tax policies for the real estate sector must be carefully studied and introduced at the appropriate time to ensure feasibility and limit speculation, according to the Ministry of Finance.

PAN Group entrusted with protection of ST24 and ST25 rice trademarks in int'l markets
PAN Group entrusted with protection of ST24 and ST25 rice trademarks in int'l markets
BUSINESSicon  06/05/2021 

The PAN Group has been authorised to register ownership rights for the ST24 and ST25 rice varieties in foreign markets and protect related trademarks.

Trademark trickery blurs rice status
Trademark trickery blurs rice status
BUSINESSicon  06/05/2021 

Unlike regional competition, Vietnamese branding approaches of well-established rice varieties could still see some improvements because of existing ambiguities in the product development strategies of the responsible government agencies.

Tech-led foundation crucial in e-commerce
Tech-led foundation crucial in e-commerce
BUSINESSicon  06/05/2021 

Vietnam’s e-commerce development is a bright spot for Industry 4.0 with a high growth rate of 20-30 per cent.

Business health to come first in future wage date changes
Business health to come first in future wage date changes
BUSINESSicon  06/05/2021 

In addition to recommending against an increase in wages this year, many experts and businesses have also opposed proposals to change the timing of regional minimum wage changes from January 1 to July 

GDVC licenses Hateco Group’s customs clearance site for post and courier items
GDVC licenses Hateco Group’s customs clearance site for post and courier items
BUSINESSicon  06/05/2021 

The General Department of Vietnam Customs has issued Decision No.1189/QD-TCHQ to grant an operational license for the customs clearance site for post and courier items of Hateco Group. The site is located in Long Bien Inland Clearance Depot in Hanoi.

Value sharing and opportunities for Vietnamese suppliers in global value chain
Value sharing and opportunities for Vietnamese suppliers in global value chain
BUSINESSicon  06/05/2021 

Multinationals corporations and foreign-invested enterprises increasingly focus on sustainability in their cooperation with local suppliers, 

BOT investors face debt, heavy losses for massive loans
BOT investors face debt, heavy losses for massive loans
BUSINESSicon  06/05/2021 

Build-operate-transfer (BOT) investors are falling into a debt trap and incurring heavy losses due to a decline in the toll fee collection, 

Natural island estate attracts foreign investors
Natural island estate attracts foreign investors
BUSINESSicon  05/05/2021 

Not only attracting domestic customers, residential areas on natural islands also attract overseas Vietnamese and foreign investors thanks to convenient, classy and private ecological living spaces.

Samsung Vietnam wants to buy renewable energy directly from producers
Samsung Vietnam wants to buy renewable energy directly from producers
BUSINESSicon  05/05/2021 

Samsung Vietnam has asked the government for a renewable energy pilot project that will enable the company to buy electricity directly from producers, instead of through the monopoly distributor Vietnam Electricity.

UCC coffee quality contest aims at supporting VN coffee production and farmers
UCC coffee quality contest aims at supporting VN coffee production and farmers
BUSINESSicon  06/05/2021 

Through the annual UCC Coffee Quality Contest, UCC Group has been contributing to promoting and improving the quality of Vietnamese coffee, towards the goal of sustainable development.

Securities firms set high profit targets for 2021 on positive stock market
Securities firms set high profit targets for 2021 on positive stock market
BUSINESSicon  05/05/2021 

As the market benchmark VN-Index broke the psychological level of 1,200 points, along with many positive outlooks about the market, securities firms set big growth targets for 2021.

Vietnam Trade Office working to protect rice trademark in Australia
Vietnam Trade Office working to protect rice trademark in Australia
BUSINESSicon  05/05/2021 

The Vietnam Trade Office in Australia has said it has taken measures to protect Vietnamese rice trademarks after an Australian firm registered for trademark protection of rice varieties ST24 and ST25.

Copper production at the country’s largest mine
Copper production at the country’s largest mine
BUSINESSicon  05/05/2021 

During the holidays, workers at Sin Quyen and Tang Loong copper smelting factory in Lao Cai have still been on duty to manufacture and provide tonnes of 99.9% purity copper for electrical appliance production factories across the country.

Development of agri-food sector needs untying knots in mechanisms
Development of agri-food sector needs untying knots in mechanisms
BUSINESSicon  04/05/2021 

The agri-food industry has been maintaining high resistance to the Covid-19 pandemic, with the potential to boost economic recovery. It posted a growth of 4 percent in 2020, equivalent to a gross domestic product (GDP) contribution of US$3.7 billion.

Some 430 businesses leave market every day in Jan-Apr
Some 430 businesses leave market every day in Jan-Apr
BUSINESSicon  04/05/2021 

Some 430 businesses left the market, while only 368 new businesses were established on a daily basis from January to April 2021, according to the Ministry of Planning and Investment.

'Land fever' harming the economy: experts
'Land fever' harming the economy: experts
FEATUREicon  06/05/2021 

Realtors typically seek profits by developing the investment value of land, rather than by increasing land prices.

Vietnamese strategy: overcoming the pandemic, maintaining high economic growth
Vietnamese strategy: overcoming the pandemic, maintaining high economic growth
FEATUREicon  05/05/2021 

Vietnam’s economy is witnessing an impressive rebound and is expected to be among the best recovering economies in the world despite Covid-19 resurgence in neighboring countries.

Construction Ministry to cool down real estate market, prioritize affordable housing
Construction Ministry to cool down real estate market, prioritize affordable housing
BUSINESSicon  04/05/2021 

Minister of Construction Nguyen Thanh Nghi said the ministry will change the policies related to the development of affordable housing by adopting a new mindset.

VIETNAM BUSINESS NEWS MAY 5
VIETNAM BUSINESS NEWS MAY 5
BUSINESSicon  05/05/2021 

Rubber industry needs to develop production chain

 
 
 
Leave your comment on an article

OR QUICK LOGIN