Vietnam finalises regulations for taxi operators, ride-hailing firms

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After over a dozen reviews of different proposals, Vietnam has finally rolled out a new set of regulations for taxi and ride-hailing services to create a level field for players.

The new law, Decree 10/2020/ND-CP that replaces the 2014 document, requires technology ride-sharing companies like Grab to put the label of “contracted car” on its driver-partner vehicles. An earlier proposal recommended that such services should install a roof light-box similar to taxis.

Per the new decree, taxi operators are granted the option of either installing lightboxes or using “taxi” decals (car stickers) on the windshield.

The decree will take effect from April 2020.

The regulation is also a result of Vietnam’s pilot e-hailing programme initiated in 2016, with participation from Southeast Asia’s giant Grab as well as local taxi firms.

Grab entered Vietnam in 2014, and with the boost from the acquisition of Uber’s business in the region, Grab has become the most popular app for ride-hailing in Vietnam. The SoftBank-backed company was said to have a 73 per cent market share in the country in terms of total rides in 2019, according to a study by ABI Research.

However, it has not been a rosy path for the ride-hailing major as it faced resistance from local taxi operators. In December 2018, the People’s Court of Ho Chi Minh City ruled that Grab should pay 4.8 billion dong (nearly $200,000) as compensation to Vinasun, concluding that Grab had been one of the factors that led to an operating loss for the taxi firm.

In addition to taxi companies, Grab’s competitors in Vietnam include Go-Viet and local ride-hailing brands FastGo and BE Group, amongst other smaller players.

Grab said earlier it will invest $500 million more in Vietnam over the course of five years, after having ploughed $200 million in the country. Grab currently offers rides, food delivery, payment service, logistics, hotel booking and GrabKitchen in Vietnam.