In a letter to Prime Minister Nguyen Xuan Phuc, Minister of Information and Communications Nguyen Manh Hung said there should be a new legal framework for ride-hailing services like Grab and Go-Viet so that technology could bring social and economic benefits as seen in countries like the U.K., Singapore and Indonesia.

While traditional taxi firms provide a whole gamut of the transport services, ride-hailing services only provide a part and so should be managed differently, he explained.

He proposed a new definition in the law for ride-hailing firms as companies which provide platforms to connect drivers and passengers using technology.

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

In its latest version of a bill on managing these services, the Ministry of Transport has tightened conditions for ride-hailing firms. They should have signs on top like regular taxis, the bill said.

But Hung believes there should be a different approach. He said that the government should use technology to manage and supervise the ride-hailing firms.

Instead of requiring them to have signs on top like regular taxis, authorities should ask them for access to data on the cars participating in the platform, he said.

Traditional firms should also be allowed more flexibility to compete, he said, explaining that instead having fixed fares they should be allowed to negotiate the fare with customers booking on apps.

He has said in the past that the digital transformation would create new business models that challenge or replace existing ones, citing the examples of ride-hailing firms challenging traditional taxis and fintech firms challenging banks.

"The question is whether the government will accept these new businesses. Digitizing the economy requires a revolution in terms of policies rather than technology."

The battle between ride-hailing firms and traditional taxis continue. In December, a HCMC court ordered Singapore’s Grab to pay domestic taxi firm Vinasun VND4.8 billion ($206,000) in compensation for alleged losses the former has caused the latter.

Grab appealed, saying it did not commit any wrong against Vinasun, a move supported by the HCMC prosecutors.