Uber taxi driver stopped in HCM City.

The department made the proposal after launching a crackdown on unlicensed public transport, targeting drivers offering services over the "Uber" mobile phone application.

The municipal police have conducted three inspections of Uber taxi services between November 28 and January 7 at Tan Son Nhat airport, Saigon railway station, and busy roads in Districts 1, 3, and 5.

Police found 38 violations -- offering an unlicensed transportation service, absence of identification insignia, failing to display transportation fees, and failing to produce a contract to carry passengers for Uber. Fines totalled  nearly VND200m.

The HCMC transport department will work with relevant authorities to make Uber register as a transportation service, not just as a hub linking intending passengers with available drivers. Uber may be banned from the city if it fails to comply.

 “Uber is operating in transportation, which is not covered by its business license,” said Nguyen Thanh Chung, the department’s director.

Chung said Uber was granted a business license in August 30 to operate in management consultancy and market management.

“Uber applies software to connect passengers with transportation companies, earning a commission and, as such, its operations are illegal," Chung said.

The department has stopped 54 vehicles operating under Uber and found 47 were not licensed as public transport.

Uber is leveraging a computer application that offers lowers fare for passengers by connecting them with drivers who will operate for a set fee, without the cost of installing certified and regulated meters or requiring centralised despatchers.

Authorities are concerned about the lack of regulation of drivers and their vehicles, passenger safety, insurance protection in the event of accidents, and inadequate income records by drivers attempting to avoid tax.