Grab and Uber still in hot water for unfair competition

There is a debate over Grab’s disregard for the law, as well as the unfair competition posed by taxi services using technology, such as Uber and Grab.

Allegedly, there are significant differences between the tax figures of Uber and Grab and traditional taxi companies like Vinasun

At the dialogue held by the Ministry of Transport (MoT) on June 28 about passenger transportation by taxis and pilot projects on technology in managing and connecting contracted passenger transportation, some stakeholders voiced concerns over unfair competition of enterprises providing taxis services using technology.

There are allegedly big differences among the tax figures of Uber and Grab and traditional taxi enterprises like Vinasun. 

An unofficial source of information said that in 2016, Grab reported a loss of hundreds of billions of VND, “possibly due to regularly reducing prices for customers.” Running such hefty losses, Grab did not pay corporate income tax. The total taxes paid by Grabtaxi Co., Ltd. in 2016, including corporate income tax, value added tax, and license tax, was only a portion of the taxes paid by Vinasun.

According to the annual tax figures, a representative of Vinasun said that they suffered a lot to fulfill all tax obligations, while other enterprises benefited from “unfair competition, including not fulfilling all tax obligations.”

Also, he raised questions about the tax obligations of individuals and organisations working for Uber and Grab, because their number is increasing, while Grab and Uber reported losses. Additionally, he asked whether Grab and Uber are responsible for declaring tax on behalf of their drivers.

At the beginning of June 2017, Vietnam’s General Department of Taxation issued a document to require the Hanoi and Ho Chi Minh City departments of Taxation to submit a report on the current situation of the taxation of traditional taxi companies and Uber and Grab taxis. However, the results have not been released to the public yet.

Regarding the new carpool services Grabshare and UberPOOL that Grab and Uber are deploying, delegates at the meeting accused these two enterprises of deliberately ignoring regulations, claiming that they are implementing these services although MoT had sent them an urgent document requiring them to stop the carpool services of all contracted cars in Vietnam.

A delegate from Danang, the city that does not allow Grab cars to operate, said that there are still about 1,000 active Grab cars in the city.

“Why does Grab still operate when local authorities withdrew their permission?” asked Le Quang Vinh, chairman of Phu Hoang Transportation Service Joint Stock Company based in Danang.

Deputy Minister of Transportation Nguyen Hong Truong said he would note the feedbacks of the enterprises and MoT will work with Grab and Uber as well as inviting the leaders of the four cities and provinces that are implementing pilot projects on taxis applying technology to discuss this business model.

By Trang Vu

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