Ministry caves in to Uber and Grab Taxi business model

It is expected to replace the Decree 86 on the businesses of car and bus transportation issued in 2014. 

A majority of taxis in the country operate in big cities, with 18,629 taxis of 88 firms working in Hanoi and 10.850 taxis of 23 firms in HCM City. 

The Ministry of Transport, the people's committees of Hanoi and HCM cities report that several firms can’t provide the list of taxi drivers, the number of their car fleet, taxi badges, or labour contracts with their drivers.

Agencies issued VND436.9m (US$19,200) in fines for 38 vehicles that don't have taxi badges, 40 that don't have business licences and 15 without transportation contracts. 

The ministry hopes the new draft will better manage the transportation firms and encourage firms to invest in technology and improve their services. In the draft, the ministry proposed to add a new article that allows operators to use software to connect the operator, drivers and passengers together instead of relying on the company's traditional central dispatch systems.

This regulation will support the operation of Uber and Grab Taxi in Vietnam. The draft will remove the requirement that transportation firms must have a certain number of cars while electronic contracts will be legalised.

The draft bans firms from picking up passengers at their headquarters or offices of their agents regularly to prevent the growth of unofficial taxi ranks. The number of trips that have the same stops of a transportation firm must be less than 30% of that firm's total trips in a month.