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Uber says it wants to be partner of Vietnam’s transport ministry

Uber says it wants to be partner of Vietnam’s transport ministry

Saturday, January 03, 2015, 13:22 GMT+7

Uber wishes to be able to cooperate with the Vietnamese Ministry of Transport in developing apps to solve traffic problems, a regional company official has said in a letter sent to the ministry head.

Transport Minister Dinh La Thang has announced that the transport ministry and the Vietnamese government encourage Uber to operate in Vietnam, so long as it works under the law, and its partners are licensed to offer transportation services.

On December 12, following a meeting with Uber representatives, Minister Thang concluded that the San Francisco-based company is a tech firm operating under a license granted by the Ho Chi Minh City administration, and thus is not an entity under the management of the transport ministry.

Jordan Condo, Uber's head of public policy for the Asia Pacific region, said in the letter he agrees with the conclusion, adding the company will follow recommendations made by the transport ministry.

Condo also expressed his wish that Uber and the ministry can discuss the development of apps for transportation. Uber wants to become a partner of the ministry in resolving issues such as traffic congestion, he wrote.

Thang assigned the transport ministry’s transportation department to file a request to Uber, asking the company to only contract licensed transport firms.

Uber should only partner with businesses whose car fleets are equipped with badges, logos and tracking devices, Minister Thang noted. The transportation department is also tasked with demanding that transport companies stick to the law if they are using Uber’s services, he added.

With Uber refusing to publicize the list of its Vietnamese partners, Minister Thang has ordered that the transport ministry’s inspectors conduct regular or unexpected checks on Uber cars and sanction violators, if any.

Uber, which connects passengers and drivers via a smartphone app, started offering services in the Southeast Asian country on July 31, with rides now available in both Hanoi and Ho Chi Minh City.

As in many other countries where it operates, Uber is facing legal challenges in Vietnam, including its legality to operate as a transport business and tax issues.

Last month the General Taxation Department under the Ministry of Finance said that Uber would have to pay 10 percent taxes on its total revenue if it is licensed to legally operate in Vietnam.

The department elaborated that Uber will have to pay a five percent corporate income tax on the total revenue it earns from the local market, adding that Uber International B.V., which pockets 20 percent of what passengers pay for Uber services, will have to pay another five percent value added tax on its turnover in that case.  

For the local transport firms directly partnering with Uber International B.V., they will have to pay tax on the remaining 80 percent of the payment, the taxman said.

Strengthened checks

Inspectors with the Ho Chi Minh City Department of Transport announced on Friday they would crack down on illegal taxis in the city starting January 1, and Uber cars will also be checked.

A cab will be deemed breaching regulations if it does not have a badge, or taxi meter, according to the inspectors.

Eleven Uber cars have been fined so far in the southern metropolis.

Le Hong Viet, deputy head of the transport ministry’s inspectorate, said work must be done to legalize Uber operations as it has won over many passengers thanks to the convenience and features the service offers.

The Ho Chi Minh City Taxi Association also said on Friday it was satisfied with the conclusion of Minister Thang on how to deal with Uber.

The association lodged a complaint to the transport ministry last month, saying Uber would hurt the traditional taxis.

It also sent an appreciation letter to Minister Thang to thank him for his handling of the petition, according to chairman Ta Long Hy.

Uber customers use the app to request rides and track their reserved vehicle's location, with information, including the fare and estimated arrival time, made known before they get in the car.

The complete fare is automatically billed to the customer's credit card at the end of a ride.

Uber is a controversial service in many of the 250 cities worldwide the company has a presence in, mostly because it can offer lower fees due to the absence of regulations.

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