Ministry of Transport proposes that Grab cars are not taxis

The Ministry of Transport has just officially submitted to the Prime Minister a draft Decree on business and conditions for business of automobile transportation (Decree amending Decree 86/2014). Accordingly, the drafting unit proposed to classify Grab as a contract vehicle, not a taxi as proposed by taxi businesses.

In the Draft Decree submitted to the Prime Minister, the Ministry of Transport continues to maintain the view that the use of software to connect customers with drivers, set fares, etc. is defined as a transportation business. This regulation will eliminate long-standing controversies about Grab, Uber, etc. being software businesses, not transportation, so they are not regulated by transportation business conditions.

The country currently has more than 36,000 pilot vehicles using electronic contracts.

However, while taxi businesses and associations propose a general regulation that all vehicles with less than 9 seats operating in the transport business are considered taxis, the Ministry of Transport does not think so.

Accordingly, for taxis, there are technology taxis (using software to book and calculate fares), traditional taxis (using meters to calculate fares), or a combination of both. These vehicles must have a “taxi” sign on the roof of the vehicle. For contract transport vehicles, there are paper contracts or electronic contracts, but contract data must be transferred to the local Department of Transport for monitoring and fulfilling obligations to the state. In this group, there are electronic contract vehicles as being piloted (ie Uber, Grab...).

Although Uber and Grab are not classified as taxis, but as electronic contract vehicles, to ensure fairness, the Ministry of Transport has set out similar business conditions for these two groups.

As with taxis, they must have a capacity of less than 9 seats, be no more than 12 years old, and cannot be converted into 9-seat vehicles as taxis.

With electronic contract vehicles, only enterprises and cooperatives that are granted a license to conduct passenger transport business under contract are allowed to use cars with less than 9 seats to conduct passenger transport business using electronic transport contracts.

At the same time, electronic contract vehicles with less than 9 seats must also have a usage period of no more than 12 years, and vehicles converted from multiple seats to 9 seats must not be used to transport passengers (similar to taxi conditions).

“This condition is to ensure fairness for contract vehicles and taxis, because this type of vehicle has the same nature, scope of operation, and vehicle capacity as a taxi. At the same time, after 2 years of piloting the operation of electronic contract vehicles, problems have arisen, and business conditions are not similar, leading to disputes and complaints between units. Therefore, the draft makes the conditions for the two types equivalent to ensure fairness,” the Ministry of Transport stated its opinion on the draft.

In addition, the Draft Decree submitted to the Prime Minister also adds new regulations on the management and use of electronic transport contracts; regulations on the responsibilities of organizations, units and individuals related to the implementation of electronic transport contracts; encourages enterprises and cooperatives in passenger and cargo transport to innovate technology and increase the application of information technology to reduce transportation costs.