Taxi firms are calling for fair competition with tech-based rivals Uber and Grab, which have seen a rapid development in the past two years in Viet Nam.

A taxi in Ha Noi. The rapid development of Uber and Grab has quickly narrowed the traditional taxi market share. 

Ta Long Hy, chairman of HCM City Taxi Association, told a conference on Thursday that the taxi market has seen unfair competition between traditional firms and foreign companies with strong financial potential and state-of-the-art technologies.

Hy said the number of licenced traditional taxis with less than nine seats in HCM was reduced from 20,000 in 2010 to 11,000 this year. The rapid development of Uber and Grab has quickly narrowed the traditional taxi market share, hurting cabs in their own playground due to decreasing number of passengers and incomes.

Tax policies are also causing concern for traditional taxi firms, including a 10 per cent value added tax and 20 per cent corporate income tax. “The Ministry of Finance (MoF) levies 3 per cent VAT for Uber. We urge authorities to impose a common tax policy for both traditional and tech-based taxis of 5 per cent,” he said.

Do Quoc Binh, chairman of Ha Noi Taxi Association, said taxi companies are bound by strict business conditions regarding parking areas, registration licences, logos, price lists, uniform and price registration, while Grab and Uber are not subject to any conditions.

“The Government’s policies seem to be tightening the operation of traditional taxis while loosening management of Grab and Uber,” Binh said.

He said Uber and Grab should be managed as regular taxi firms to create fair competition.

Truong Dinh Quy, Vinasun Corp’s deputy general director, claimed Uber and Grab had broken the law to enjoy low tax rates, hurting the State budget.

Figures from the General Taxation Department showed that the total tax collection from 15,000 Uber and Grab taxis in 2014-15 was VND19 billion (US$832,000), while Vinasun contributed VND692 billion from its 6,000 taxis.

“We can see that the State budget has lost a big tax amount. This has been unfair to traditional taxi firms,” Quy added.

Nguyen Van Thanh, chairman of the Viet Nam Automobile Association, said the association would work with the MoF’s agencies to review tax calculation and ensure their fairness.

“We should ask legal agencies to resolve the issue. We should prevent Uber from conducting tax evasion. We will not ask to stop Uber operations in Viet Nam but require that they complete their business registration,” he added.

In addition, he urged taxi companies to update their business systems, improve service quality and thus enhance their competitiveness. 

VNS