Uber launches a fare plan as cheap as a motorbike taxi.

The new UberX service offers fares of only 5,000 VND/km in Hanoi and 8,500 VND/km in Ho Chi Minh City, which are 40% and 25% cheaper than other taxi companies, respectively.

Accordingly, the UberX service shows a fare of only 152,500 VND for a trip from Phu My Hung (District 7, Ho Chi Minh City) to Tan Son Nhat Airport (Tan Binh District). In contrast, a domestic budget taxi would cost up to 222,000 VND.

Uber launched its affordable taxi service on April 7th.

Mr. Dang Viet Dung, Director of Uber in Vietnam, argues that UberX's lower fares compared to other taxi companies do not constitute unfair competition. The average taxi fare (converted) per kilometer in Thailand is 4,500 VND, in the Philippines 5,600 VND, in Indonesia 7,200 VND, and in Singapore 10,000 VND/km... Meanwhile, in Vietnam, the average taxi fare ranges from 12,000 to 17,000 VND/km. "The reality is that most passenger transport vehicles in Vietnam are only utilized at 15%-20% capacity, so fixed costs per kilometer are high. Therefore, many businesses have to maintain high prices to ensure profitability," Mr. Dung said.

According to lawyer Nguyen Van Hau, Vice President of the Ho Chi Minh City Bar Association, Uber currently operates under the following process: receiving customer requests, providing two-way information to both drivers and customers, then dispatching vehicles and deciding on the route, determining fares, monitoring the journey, collecting fares at the end of the trip, and finally, sharing profits with the vehicle owner. With this process, Uber operates like a business providing passenger transportation services by taxi. However, Uber has not yet registered its passenger transportation service business by taxi, which violates the regulations in Article 9 of the Enterprise Law.

Regarding the fare reduction, lawyer Hau argued that it does not violate any legal prohibitions because, at 5,000 VND/km, the price may be below the total cost, but Uber is not currently a dominant or monopolistic enterprise in the taxi market. Furthermore, in essence, this price reduction is based on a transportation contract between the vehicle owners participating in the Uber system and the customers, falling under the free agreement of the parties involved.

Meanwhile, representatives of the Ho Chi Minh City Taxi Association said they will continue to petition the Government and protest Uber's actions in launching a new fare package that negatively impacts the business of other taxi companies.

According to NLDO