MoT to stop entries to Uber and Grab pilot projects

Ride hailing applications shake up Vietnam's passenger tranpsort scene

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MoT has just sent a document to localities that are piloting technology in managing and connecting contracted passenger transportation, asking local authorities to review the number of participants.

MoT asked the localities to stop allowing more cars to participate. This decision is aimed to avoid an outbreak of new taxi services using technology, which could pressure the transportation infrastructure and would prove unfair to other transportation service providers.

According to MoT, related agencies have granted licences for the pilot projects of seven companies, including Grabtaxi Co., Ltd. (Grabcar), Hanoi 57 Transport Joint Stock Company (Thanhcong Car), Mai Linh Group (Mailinh Car), Investment Cooperation and Development Joint Stock Company (Home Car), Vietnam Uber Trading Co., Ltd. (Uber), Startour Joint Stock Company (Vic.Car), and Linh Trang Trading and Services Company (LB.Car).

According to the statistics of MoT, as of April 2017, the number of contracted passenger automobiles (less than nine seats) to join these pilot projects was 13,500, belonging to 235 enterprises in Hanoi, Ho Chi Minh City, and Khanh Hoa province.

Regarding traditional taxis, there are 19,200 taxis of 77 enterprises in Hanoi. Hanoi plans to keep the current master plan for taxis and it does not allow any enterprises to increase its fleet. According to the preliminary statistics of the Hanoi Department of Transportation, the number of taxis applying technology has increased to 7,000.

In Ho Chi Minh City, there are about 11,000 traditional taxis for many years now. However, the number of taxis applying technology, despite only appearing recently, is twice as many. In particular, at the end of April, there were 22,000 taxis applying technology. According to a leader of the Ho Chi Minh City Department of Transportation, this number went “far beyond their imagination.”

To deal with the rising number of taxis applying technology, in April 2017, the departments of Transportation in Hanoi and Ho Chi Minh City proposed MoT to stop the pilot projects on taxis applying technology.

The reason is that the number of taxis applying technology has spun out of control, overtaxing transportation infrastructure and posing unfair competition to traditional taxis. Meanwhile, it is difficult for related agencies to manage and punish these new kind of taxis in case of violations.