Ministry of Transport recognizes electronic contracts of Uber and Grab

The Ministry of Transport has just submitted to the Government a draft Decree replacing Decree 86 of the Government on business and conditions for business of automobile transportation.

Evaluation after 2 years of piloting electronic contracts,The Ministry of Transport affirmed that in order to improve business efficiency, create a healthy competitive environment, and at the same time be consistent with the development trend of information technology,It is necessary to have regulations to allow the official application of electronic contracts.Applicable subjects are enterprises, cooperatives, and business households operating in passenger transport under contract and tourism.

TThe draft decree mentions the regulation that electronic transport contracts are the application of software on a website platform or mobile application, other open applications to connect and provide transportation services between enterprises, transport business cooperatives with business licenses for passenger transport under contract, tourism, taxi and freight transport business with transport hirers.

According to Mr. Tran Bao Ngoc, Director of the Department of Transport (Ministry of Transport), vehicles currently operating with electronic contracts will be managed more strictly, no longer operating under a pilot model but officially operating.Accordingly, software providers must register their business with the Department of Planning and Investment of localities, register e-commerce with the Ministry of Industry and Trade, and register with the Ministry of Transport and the General Department of Taxation for clearer tax management.

“Tax authorities will connect with technology units, each trip will capture the amount of money through software, manage more closely, and be more transparent,” said Mr. Ngoc.

The leader of the Department of Transport affirmed that the draft decree will have additional conditions for contract vehicles and electronic contracts such as having to register service quality, fully post information on both vehicle doors, and stick the logo and badge of the Department of Transport.

In addition, the Ministry of Transport proposed to remove the regulation that the age of taxis should not exceed 8 years for special urban areas and 12 years for other localities in Decree No. 86. Instead, the Ministry of Transport agreed that the age of taxis should not exceed 12 years nationwide to avoid fraudulent registration in other localities but operating in special urban areas.

According to the Ministry of Transport, after 2 years of piloting the application of electronic contracts, many people initially responded and used it due to the convenience of the service and reasonable travel costs. Through the connection software, passengers can know which vehicle, which driver and which route to take to reach the destination, and know the fare to pay...This application also only allows one car to receive and pick up passengers, there is no situation where multiple cars receive and drive to the pick up point.

At a recent meeting, Minister of Transport Nguyen Van The also requested the advisory agency to propose regulations to manage Uber and Grab in accordance with regulations, equal to other types of transport.

The Minister also raised the issue of Uber reporting a loss of thousands of billions of VND each year, but is it really a loss or is it "due to unfair competition, maximum price reduction to compete with traditional taxis". Uber wants to operate in Vietnam, it needs to comply with the correct business model to ensure healthy competition and safety for the people.