MoT pushes for inspection of non-compliant e-hailing apps

Illustration photo - source: Nguoi lao dong

The MoT has so far only approved pilot project applications submitted by two companies, namely GrabTaxi Co., Ltd. (Grab) and Anh Duong Vietnam JSC (Vinasun). As reported by newspaper Lao Dong, the official letters, both of which were signed by Deputy Minister of Transport Nguyen Hong Truong, said the MoT had issued guidance documents to assist Grab and Vinasun to implement their pilot projects in selected provinces. Grab and Vinasun started implementing the MoT’s Decision No. 24/QD-BGTVT to pilot using technology to support management and connection in contractual passenger transportation in January and July 2016, respectively.

The MoT’s official letters said that the projects have improved the ability of provincial Departments of Transport to track the number of transport entities and the number of participating vehicles actively using e-hailing apps, At the same time, it lead to an increase in the number of participating vehicles satisfying technical and e-contract application content requirements, but perhaps most importantly, the pilot programmes created a far more transparent framework for passenger payments and tax collection from transport companies and cooperatives.

Meanwhile, there have been several cases where vehicles using e-hailing apps and other entities have not complied with current regulations, including operating without “contract-car” badges, cooperating with e-hailing transportation apps that have yet to be approved for the pilot project status, and by failing to fulfil tax obligations.

One of the official letters singled out Uber and its drivers for violating requisite tax regulations. “Despite registering as household business entities and having monthly income that could reach a few thousand dollars, most Uber drivers do not pay personal income tax and value-added tax (VAT), while the application service provider operates outside of the government’s control in terms of tax collection.”

There are approximately 4,000 Uber taxis currently operating in Ho Chi Minh City alone. Subtracting drivers’ wages, Uber can earn up to VND30 billion ($1.35 million) per month from its 20 per cent service fee, which is transferred to the Netherlands and cannot be subjected to tax.

In many countries, Uber’s operations are considered illegal and are suspect of competing unfairly with traditional taxi companies. It has been reported that the Ho Chi Minh City Department of Transportation is considering requesting the City People’s Committee to designate Uber’s operations illegal.

One of the MoT’s official letters also shared that the MoT has yet to receive a pilot project submission from Uber that meets its requirements despite the MoT’s repeated efforts to provide guidance to the company on the matter.

The MoT has requested that the departments of Transport in Hanoi and Ho Chi Minh City continue providing guidance to transportation entities, including Grab and Vinasun, on how to implement the approved pilot projects in compliance with relevant regulations. In particular, the MoT has emphasised the need for participating entities to cooperate with tax authorities by furnishing accurate vehicle participation data to enhance tax collection and to avoid cooperating with e-hailing transportation apps that have yet to be approved for the pilot project status.

According to the official letters, the departments of Transport in Hanoi and Ho Chi Minh City shall order their inspectorate divisions to coordinate with local police and tax authorities to enhance the inspection and handling of violations.

Furthermore, the MoT asked the departments of Transport in Hanoi and Ho Chi Minh City to submit a report by September 20 on cases involving e-hailing transportation apps that have yet to be approved for the pilot project status and that are found in violation of the law, as the press has reported several times before.

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