As ride-hailing services like Grab have become increasingly popular, traditional taxi firms are urged to apply technology and adapt to ride-hailing trend.

Minister of Transport Nguyen Van The urges traditional taxi firms to adapt to ride-hailing trend

This information was stressed by Minister of Transport Nguyen Van The on July 13 at the meeting to get comments and suggestions considering the draft decree replacing Decree No.86/2014/ND-CP on business and conditions for automobile transportation.

Minister The said that the line between traditional taxis and tech-based transportation services is blurred, which remains a pressing problem. Decree 86 needs to make adjustment to ensure fair treatment for all modes of transportation as prescribed by the current regulations. It also requires measures to manage unlicensed and unregistered taxis.

The Ministry of Transport (MoT) called for harmony between traditional taxis and ride-hailing services such as Grab. It is also looking to facilitate the operation of traditional taxis with solutions relating to driver management and corporate responsibility for customers.

“In today’s context, traditional taxi firms applying ride-sharing apps will not only gain advantages, but also ensure the quality and their prestige,” The said. “Both traditional and tech-based taxi service providers have the same nature, meaning that they are similar in terms of conditions. Therefore, traditional taxi firms have to adapt to rail-hailing trend or perish. Applying technology would help traditional taxi operators survive and grow.”

On the same note, Nguyen Thanh Hung, chairman of the Vietnam E-Commerce Association, lauded the pilot ride-hailing services as it is driving the development of new business models. However, he noted that it is inappropriate to impose the new models based on the old ones.

“We should not force the incorporation of the new models into legal framework that has yet to develop. Instead, we should have a new approach to solve conflicts between the new and old business models,” he said.

According to the representative of the Central Institute for Economic Management (CIEM), the draft decree treats tech-based firms like traditional taxi firms, which will eliminate innovation. The government should review the business conditions of traditional transportation because many constraints and barriers are hindering them from participating in transport business.

“Rather than trying to control new ideas, we should make efforts to unlock old business conditions,” he said.

Le Dinh Tho, Deputy Minister of Transport citing the example of Singapore that does not manage ride-sharing services like Uber and Grab. Instead, the singaporean government has created more favourable business conditions for traditional taxi firms to operate amid the rise of ride-hailing trend.

Speaking at the meeting, the representative of Grab also approved of the development direction of the law as well as the introduction of new regulations into the decree. It is to regulate software firms in the field of automobile transportation. Software businesses should focus on the expertise of technology and software development.

Minister The said that it is important to introduce the business conditions for companies providing and applying software in automobile transportation. Therefore, these companies will have responsibility with drivers and commuters and ensure safety in case of incidents.

MoT will create a playground for tech-based taxi service providers and the regulations must be enforced.

Under the plan, MoT will submit the draft decree replacing Decree 86 to the government before the end of this month for approval.

Grab may have to operate as taxi firm

Once the government approves the proposal of the Ministry of Transport (MoT), Grab will have to operate as a taxi firm and have to install a light box with the words “Electronic taxi.”

MoT's new draft decree would identify Grab and other ride-hailing apps as taxi firms

This information was in the amended draft decree built by MoT to replace Decree No.86/2014/ND-CP on business and conditions for transportation business by automobile.

Accordingly, based on the need to recognise Grab as a taxi firm, MoT asks Grab’s taxi driver partners to install light boxes with the words “Electronic taxi”. Besides, they will have to install software to connect with customers and supply customers information about the drivers’ private information, vehicles, the route, general fares, as well as the fares for the specific routes.

According to MoT, these requirements will create favourable conditions to develop the model of passenger transport cooperation between ride-hailing apps and taxi firms, encouraging the application of technology in the transport sector, while simultaneously creating a more transparent and fair playground for the two sides.

In the amended draft decree, MoT mentioned that at the existing Law on Road Traffic there are no regulations managing the operations of taxi firms receiving payments via electronic channels, however as technology is developing rapidly, MoT wants to cover the area in the new decree.

Besides, taxi associations proposed authorities to build regulations to make ride-hailing vehicles easier to identify by equipping them with uniform features.

MoT will submit the amended draft decree to the government for approval.

It is not the first time that MoT expressed that Grab needs to be managed as a taxi firm.

Previously, at a meeting on the draft decree on business and conditions for transportation business by automobile organised in March (at the time Uber had yet to leave Vietnam), Minister of Transport Nguyen Van The stated that the operations of Uber and Grab and traditional taxi firms are similar.

Thus, if Uber and Grab agree to operate under the management model applied to traditional taxi firms, they will be permitted to maintain operations, otherwise, they have to leave Vietnam.

VIR