Taxi companies in Ho Chi Minh City have had to cut 3,000 cars from their fleets since the arrival of Uber and Grab, according to the city's Taxi Association.

The number of cars registered for Uber and Grab risen to 28,000 in Ho Chi Minh City

In their latest report, the association said that four companies have been dissolved and merged over the past three years since Uber and Grab began operations.

According to the association, the city had around 12,000 taxis which were transporting about 200 million passengers or 35-40 per cent of public transport annually in 2010.

But since their arrival in 2014, Grab and Uber with their "huge promotions and unfair competition" had seriously affected the operation of local taxi companies. The number of vehicles managed by local taxi firms have been slashed to only 8,900, while the number registered for Uber and Grab risen to 28,000, the report said.

The association warned that the number of app-based taxis has exceeded the city's plan for taxi number of 16,500 by 2025, which they claimed was causing serious traffic congestion. It also complained that the two companies had given false reports on the number of vehicles they used and were avoiding taxes in Vietnam.

“We are very sorry that the Ministry of Transport are not listening to our opinions and proposals to suspend the operation of Uber and Grab in Vietnam," the association said in its report. "Local taxi firms may die due to the government's improper policies."

The association insisted that the pilot projects which permit transport companies to use applications to connect and manage customer transport activities should not be renewed.

In June, Hanoi, Danang and HCM City’s taxi associations also sent a joint petition to Prime Minister Nguyen Xuan Phuc, asking for him to intervene to guarantee ‘a fair business environment’.

In the petition, the associations claimed that Uber and Grab operations violate Vietnam’s laws.

They specified that under the Law on Road Transport and Government Decree 86, taxi services were a conditional business model so vehicles need a badge, logo and meter; however, Uber and Grab cars do not have these. 

Meanwhile, Uber and Grab cars are allowed to use many streets which taxis are banned from. Taxis are tied to strict business regulations such as parking, registration licensing, roof-signage, listed fares and driver uniforms.

Uber is paying 3% value added tax, while local taxi firms are paying a 10% VAT and 20% corporate income tax. Uber now keeps 20% of a fare and sends 80% back to the driver.

Grab and Uber continue to offer huge discounts to passengers to grab market share from taxi companies. They are 25-50% cheaper than traditional taxis, and passengers are informed before the ride how much it will cost them.

The associations called authorities to set the same rules for Uber and Grab.

dtinews