Traditional taxi firms attributed unfair tax obligation between them and ride-hailing firms to such a decision.

Illustrative photo 

The Hanoi Taxi Association has asked the local authority for permission for the transition from its current business model of traditional passenger transportation to electronic contract-based passenger transportation like Grab or Uber, local media reported. 

General Secretary of the Association Ho Quoc Phi said taxi firms have integrated software and technologies for car booking, and met the requirements to operate like ride-hailing firms. 

 Phi attributed unfair tax obligation between traditional taxis and ride-hailing firms to such a decision, while suggesting tax authority refund the difference in tax payment from previous years in case of taxi firms having qualified for business conditions of both traditional and ride-hailing firms.

 The association asked for clarification from the Ministry of Labor, War Invalids and Social Affairs (MOLISA) whether taxi firms could liquidate working contracts with drivers as those companies turn themselves to be ride-hailing firms. 

 According to the association, after liquidation, cab firms will change the operation to car renting, as the relation between electronic contract-based passenger driver with ride hailing firms is partnership. In this case, drivers are seen as individual business, not an employee of Grab. 

 In June, the Ministry of Transport (MoT) released a draft decree in replacement of Decree No.86 that sets conditions for transportation business. Under the draft regulation, under-nine seat cars operating under electronic contract must have light-box clearly stating “Electronic taxi” installed on their roof. 

 Meanwhile, electronic taxis will have software connecting drivers and passengers, providing them with information on the company, driver, car, general fare and fares for specific routes, among others, and receive payments via electronic channels. 

 According to the MoT, the requirement would help better differentiate between private cars and taxis, preventing the case of the latter disguise as private cars. 

 However, in a meeting on July 22, Prime Minister Nguyen Xuan Phuc requested the MoT to drop the proposal that requires electronic contract-based vehicles to have a roof sign.

 The MoT should consider using technologies as instruments for management, instead of traditional methods such as light-box, Phuc said.