Uber Technologies Inc. will expand its presence to other cities in Vietnam while the online car-booking company is facing accusations of illegal taxi service and tax evasion in this market.

A driver of the Uber taxi service is stopped by a team of police and transport inspectors in HCMC last week.

Uber communications head for South Asia Karun Arya confirmed the expansion plan. He mentioned Danang as one of the next cities in Vietnam that the company intends to expand its mobile application-based service to.

Fielding the Daily’s question about HCMC’s transport inspectors and police withdrew the driving licenses and car registration certificates of five drivers providing the Uber service last week, Arya said Uber does not own or operate any vehicles or drivers but only help build a bridge between passengers and licensed transport firms.

Uber launched its service in HCMC in July this year and has since signed contracts with 200 licensed transport firms.

Vehicles used for Uber’s service have been checked in terms of quality and insurance payment in accordance with Vietnam’s traffic law, Arya said. But he declined to name the transport firms that Uber has partnered with in this city.

Regarding the tax evasion allegation, Arya said transport firms should be responsible for fulfilling tax obligations, and if they evade taxes, the authorities can ask them to pay tax based on the contracts signed with Uber.

Deputy Minister of Transport Nguyen Hong Truong said the taxi sharing service supported by Uber’s mobile phone app is illegal and poses risks for both passengers and drivers in terms of safety and insurance though its fares are lower than traditional taxi services. This service also causes tax losses for the State.

Truong raised the point after complaints, mostly by traditional cab providers, about the Uber tax service. The HCMC Taxi Association urged authorities to put it under control with the same conditions currently applicable to traditional taxi operations.

However, Minister of Transport Dinh La Thang was quoted by the ministry’s Giao Thong (transport) newspaper as saying that the Uber taxi service costs lower than normal taxi services so passengers can benefit.

“Why don’t we seek to legalize the Uber taxi service to better manage it? We should put off the idea of prohibiting what we cannot manage,” Thang stressed.

The minister requested relevant agencies to prepare regulations and legal documents to enable authorities to manage the new service effectively and passengers to benefit from it.

Uber has expanded its service to more than 200 cities in 50 countries since its launch in 2009. The service has been hailed by passengers for its reasonable fares and high quality since it was initiated in HCMC about five months ago.

To benefit from the service, passengers need to use the mobile app of Uber to register their routes and will be then connected with a car owner using the app. When the connection is set up, passengers will be informed of fares, drivers and cars they will get on.

Passengers can use Visa or MasterCard to pay fares online, which are up to 20% lower than charges for traditional taxi services.

SGT