"Many ministers have vetoed this proposal," Prime Minister Nguyen Xuan Phuc said at a meeting Monday.

The premier required the Ministry of Transport (MoT) to eliminate unnecessary business conditions for transport services and use information technology instead of traditional means to manage ride-hailing firms like Grab. 

Last month, MoT Minister Nguyen Van The sent a draft decree to replace Decree 86 on business conditions for road transport businesses to the PM, requiring 'electronic contract-based vehicles' under nine seats to have a light box on top. 

The MoT said the installation of such boxes for app-based ride-hailing vehicles would enable better management of transport businesses, help customers identify ride-hailing cars on the street and differentiate between a transport service provider and a supplier of other services.

It would also prevent private vehicles from providing transport services illegally, causing difficulties for traffic police in inspecting, controlling and organizing urban traffic, the ministry argued.

Vietnamese officials have been scratching their heads over managing ride-hailing services since traditional taxis are crying foul, claiming their business is being damaged by competitors like Grab.

Grab is the leading ride-hailing company in Vietnam. The company provides its services to an estimated 20 percent of Vietnam’s population every day, provides work for 175,000 drivers and has contributed VND441 billion ($19 million) to the state exchequer in taxes last year.

While the ride-hailing market in Vietnam has seen new entrants after the departure of Uber, which sold its Southeast Asia operations to Grab, including Vietnamese firm Fastgo and GoViet, an affiliate of Indonesia’s Gojek, none have come close to matching Grab’s ubiquitous presence.

This has allowed Grab to continue dominating the Vietnamese market, and it has aggressively expanded its services to include GrabFood, a food delivery service, and GrabCar Business, targeting the corporate sector.

These moves pose further challenges for long-standing taxi firms like Mai Linh, Taxi Group and Vinasun, who have repeatedly voiced complaints against what they see as preferential treatment being given to a competitor.