Grab is "wiped out" if it is managed as traditional taxi company

VCN - Feedback on amendments in the draft Decree 86/2014 on business and transportation business conditions by automobiles that has been submitted to the Government by the Ministry of Transport, as well as being afraid of being “wiped out” in Vietnam, the representative of Grab said that if Grab’s management regulations are to be like traditional taxi companies is approved, it will be a negative sign of the start-up and investment environment in Vietnam.
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According to Grab, if this draft is approved, it will be a negative sign for the start-up and investment environment in Vietnam. Photo: Internet.

Contrary with the reform of administrative procedures

According to Grab, as a pioneer in the application of information technology, contributing to the integration of Vietnam's transportation industry, catching up with the 4.0 industry wave, Grab felt very surprised and concerned with the contents and provisions of the latest draft Decree that the Ministry of Transport has submitted to the Government.

At clause 3.7 it stipulates: "Electronic transportation contracts shall only apply to cars with a capacity from 9 seats (including driver)" or at clause 3.2: "Transport business by car is the implementation of the stages of transport activities to transport passengers and goods on the road for profit purposes. In particular, there is a step of directly operating the means, driving a vehicle to transport passengers and goods; determining freight cost".

This means that cars with a capacity under 9 seats will not be subject to an electronic transportation contract and all units provide connected application and contracted electronic services will be required to become a transportation business unit. These regulations are not only going against the policy and direction of the Government on the application of science and technology and the reform of administrative procedures, but also negating the benefits and positive results of the pilot scheme of contracting car applying electronic contracts.

Before that, in January,2016 the Ministry of Transport issued Decision No.24/QD-BGTVT promulgating a pilot plan for deploying the application of science and technology to support the management and connection of passenger transportation by the contract with car under 9 seats. The implementation of the scheme has brought many benefits to consumers, transportation companies, application providers, and government agencies.

According to Mr. Lim Yen Hock, Director of Grab Co., Grab has the opportunity to provide connections of daily essential services to 20% of Vietnamese people each month and provide opportunities for direct income generation for 175,000 drivers. The contribution of Grab is growing three times a year. In the first nine months of 2018, Grab contributed VND 270 billion and is expected to contribute more than VND 500 billion in 2018.

The traditional transport businesses are afraid of competition

The application of science and technology has also helped to increase the competitiveness of small and medium transport units, thus it promotes the growth of the passenger transport industry as well as encourage domestic units to develop and implement themselves with connected applications and e-contracting. Up to now, besides Grab, there have been nearly 10 other applications of Vietnam in the pilot project and many new applications have been launched. This proves that Vietnamese enterprises are very responsive, actively approach and not afraid of competing in the market.

In particular, many taxi companies are very dynamic and have cooperated with Grab as well as many other connected application providers in the market. At some point, the revenue of the taxi drivers connected to the Grab application increased by 300% compared to the time without application.

However, according to Grab, there are some traditional taxi companies fearing innovation, fear of losing their dominant position, fear of competition. With the draft Decree 86 being submitted to the Government, Mr. Lim Yen Hock said that the concept of identifying contractual car for electronic contract is the taxi and the name of the connecting and electronic signing contract application provider is a taxi company, is a proposal by some traditional taxi business units is to assimilate, restrict the business improvement of other types, other business.

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At the same time, Grab's representative also said that if the subjective desire of some traditional taxi companies are satisfied and the benefits and important progress for society and the economy are ignored, it will really be backward and the bow in the industry's 4.0 Revolution of Transport sector. If this draft is approved, it will be a negative sign for the start-up environment and investment and business environment in Vietnam.

By Xuan Thao/ Quynh Lan

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