VietNamNet Bridge – The balance is tilting towards open-mindedness when Transport Minister Dinh La Thang orders affiliated agencies to take into prudent consideration the possibility of legalizing Uber taxi service, reversing the ministry’s own stance days earlier to curb the new transport service trend following outcries of taxi operators. After multiple controversies in the media on pros and cons of Uber onslaught on the local taxi transport market, the minister seems to be listening to calls for change, although the transport apparatus has been geared for the other way.

Uber taxi service, initiated by U.S.-based Uber Technologies Inc., was first introduced into Vietnam in late July having reached some 200 cities worldwide. The online car-booking service takes the upper hand in competing with the traditional cab service by connecting passengers with car owners via an app available for smartphones and other gadgets. The new taxi service has won the heart of many passengers, especially tech-savvy people, owing to its higher quality, greater convenience, and lower fares.

Taxi associations in the country have swiftly protested the service, pointing to unfair competition as such Uber players do not pay taxes and other charges like registered transport firms. Their complaints have been heard by many experts and officials, though a large number of others advocate the new trend.

The HCMC Transport Department, according to VTC News, has recently proposed the Transport Ministry and the Directorate for Roads of Vietnam to clarify the legality of Uber in Vietnam as the service has been launched in the city and Hanoi and is poised to spread to other provinces soon. Lawyer Nguyen Duc Chanh of the HCMC Bar Association asserts in the news website that passenger transport is a conditional business area that must be registered as per the Overland Transport Law. As Uber service is not registered, and drivers involved do not pay taxes plus other charges, their business can be declared illegal in Vietnam, he says.

Nguyen Thai Son, former head of the Legislation Division of the HCMC Taxation Bureau, echoes the point, saying in Nguoi Lao Dong that given the taxation corridor in Vietnam, it is impossible to collect taxes from Uber, and therefore, allowing for the service also means compromising with tax evasion.

In the same tone, Tran Bao Ngoc, head of the Transport Department under the transport ministry, repeats in Vietnamnet that passenger transport is conditional, requiring all entities to abide by prevailing regulations, including tax obligations. Therefore, if a certain enterprise using information technology to bypass all such regulations, it is violating rules on traffic safety, security, and environment, he stressed in the online paper.

So, actions have been taken quickly.

As recently as last Thursday, traffic police and transport inspectors in HCMC ambushed five “disguised” taxi cabs, and slapped heavy sanctions on the drivers for operating unregistered passenger transport service.

The ministry days ago sent a document signed by Minister Dinh La Thang to other State bodies, asking them to look into the issue to have proper sanctions where necessary. Deputy Minister of Transport Nguyen Hong Truong, in a press meeting this Monday in Hanoi, emphasized that Uber taxi service is illegal in Vietnam.

However, there are also numerous voices supporting Uber.

Pham Sanh, an expert in transport, observes that while many countries ban Uber, many others such as Singapore have accepted the service. That means either the latter countries have the legal system capable of governing such a service, or they accept the service first and seek to issue new rules to govern it later, he says in Nguoi Lao Dong.

Thoi bao Kinh te Sai Gon Online says the reaction by State management agencies is understandable. They cannot sit idle when a new business activity takes place beyond their control. The best way, says the online paper, is that State officials should meet Uber and vehicle owners to discuss solutions so that the service providers will adhere to prevailing regulations.

Le Dang Doanh, a veteran economist, reasons in Nguoi Lao Dong that Uber brings about benefits for consumers, so it is necessary to support the new trend and State agencies need to change the mindset of rejecting all that is beyond their control.

“Since the law has not caught up with new changes in life, then we should give new changes – like Uber – a roadmap for integration. Reality shows that many new changes will enter Vietnam, not just Uber,” he gives his suggestion.

In Thanh Nien, an entrepreneur named Nguyen Khoa Hong Thanh says in an article authored by himself that the biggest conflict is not between Uber and taxi operators. Rather, “it is the conflict between new business models and the current economic management policies in Vietnam,” he comments.

The new changes tend to prevail, given the latest move by the transport ministry.

Minister Dinh La Thang in an internal meeting on Tuesday ordered the Transport Department to study the situation and prepare new regulations to govern Uber. He stressed that if current regulations are not sufficient to govern Uber, then new rules need to be added. “Uber taxi fare is lower than the traditional one, and the people benefit from it, so why don’t we supplement regulations to govern it?” he is quoted in Tuoi Tre.

To change or not to change the law to accept the new trend remains to be seen, but as transport agencies are now ready to reconsider the situation to legalize Uber, it is likely the old mindset will give way to a new liberal business environment.

SGT/VNN