The Ministry of Transport has given the green light to Da Nang temporarily banning GrabTaxi from continuing its trial operations, via a document sent to the city’s People Committee and the car hailing company on March 10.

The ministry said it believes Grab provides convenience and continues the trend of applying science and technology in transport, but its operations require further cooperation between the Da Nang People Committee and the ministry so that suitable planning is conducted over vehicle numbers and traffic organization.

Grab will therefore only be permitted to continue operations in Da Nang if there is coordinated management by the city’s Department of Transport.

In regard to Grab’s pilot car hailing project, Da Nang does not prevent or ban any enterprise from freely doing business but Grab has continued to call for investors, bringing in more vehicles to the city and affecting traffic safety, and wrongly influencing public opinion while the city was waiting for further direction, the Department of Transport said in a press release on March 8.

According to the Department, the People Committee sent two documents to the transport ministry from November to February suspending Grab’s trial operations due to the growing number of vehicles and the city’s lack of infrastructure.

“But while the city was waiting for further directives from the transport ministry and other authorities to adjust some of the inadequate policies regarding the trial operation of Grab in Da Nang, Grab continued its advertising, calling for more investors and bringing more vehicles from other provinces into Da Nang, causing congestion and wrongly influencing public opinion,” the Department wrote in the press release.

Accordingly, the city’s Traffic Safety Committee asked the department to have internet providers block access to Uber and Grab apps and also asked police to investigate and punish any individual or organization found to be offering transport services illegally in the city.

The Department views Grab’s services as being similar to a taxi business and its presence in the city would cause a sharp rise in the number of private cars and taxis, worsening congestion. Meanwhile, there has been no regulation from the government and the transport ministry for the city to closely oversee this type of business. As a result, it has affected traffic safety, which is something that has always been kept under control in Da Nang.

According to the Department, the transport ministry sent documents in November last year reporting the results of the nine-month pilot on the application of science and technology in supporting the management of passenger transport.

Grab previously gained approval from the transport ministry to operate on a trial basis in five cities and provinces: Hanoi, Ho Chi Minh City, Da Nang, Khanh Hoa and Quang Ninh, from January 1, 2016 to January 1, 2018.

The trial, however, has caused problems in these areas, including a sharp rise in the number of newly-registered vehicles of less-than-nine-seats. “Hanoi and Ho Chi Minh City, for example, licensed more than 7,000 and 20,000 new vehicles, respectively, during the period,” the Department said.

A huge number of private motor cars from nearby provinces have also arrived in Hanoi and Ho Chi Minh City, whose owners have signed working contracts with Cooperatives’ transportation businesses while at the same time using the Grab app. Most of these do not pay taxes, causing losses to the State budget.

Hanoi and Ho Chi Minh City have implemented a range of solutions to resolve traffic jams in urban areas, but congestion has actually gotten worse. Moreover, the fact that Grab’s drivers do not have to declare information and publicly list their fares, while also not attaching Grab’s logos to their vehicles, have also made supervision difficult.

Overall, the mechanism for managing the type of transportation business Grab operates under has been inadequate and inappropriate. Tax policies and guidelines for the transport model lack specifics and have failed to ensure a fair playing field. Da Nang has also been conducting research to identify solutions in limiting the number private vehicles on its streets, to deal with congestion.

Grab, meanwhile, was not available for comment at the time of writing. GrabTaxi is the only foreign-run transport service allowed to operate in five cities in Vietnam using registered private vehicles between 2016 and 2018. Uber, meanwhile, has been providing ride-hailing services without legal permission.

VN Economic Times