New ride-hailing regulations . . .
Vietnam announced a new set of regulations for traditional taxi and ride-hailing services on January 17 that will ensure a level-playing field for both services, after 12 revisions to the drafted bill. The law, which come into effect in April 2020, mainly creates a category for new ride-hailing vehicles (“contracted car”) that is different from traditional taxis, and requires them to display labels to that effect. Taxis are also required to display decals on their windshields. The law replaces a 2014 document, and it is seen as an attempt by the Vietnamese government to bring some order into this sector, which has become increasingly competitive.
Strong resistance from taxi industry . . .
Since Uber and Grab entered Vietnam in 2014, there has been strong resistance from local taxi operators. Vinasun, once a dominant taxi player in southern Vietnam, has seen its revenues plummet in recent years due to the rise of Grab, which led to a lawsuit that resulted in Grab paying nearly C$273,000 in compensation to Vinasun for “unfair business practices.” Grab has also faced resistance from other players such as the Transport Industry Association, which petitioned the government to halt ride-hailing services and filed charges against Grab for tax evasion.
Regional dilemma . . .
As we are witnessing around the world today, government regulations are not keeping pace with innovative, evolving business models like those of firms such as Uber or Grab. Until just yesterday, when British Columbia’s Passenger Transportation Board finally gave the green light to Uber and Lyft, ride-hailing services were banned in Metro Vancouver. While heavy government involvement may stifle innovation and weaken national competitiveness, some degree of regulation is needed to ensure public safety and a level-playing field for all players. Singapore and Malaysia have introduced regulations into their ride-hailing sectors that meet their specific needs. Vietnam, likewise, is attempting to strike the right balance with new regulations that will promote both innovation and the public good.
- Deal Street Asia: Vietnam finalizes regulations for taxi operators, ride-hailing firms
- Nikkei Asian Review: Southeast Asia must find the right balance in ride-hailing regulation
- Vietnam Investment Review: Ride-hailing rule concerns persist