Both Grab and Uber as major ride-hailing firms in Vietnam have rejected as groundless accusations of tax evasion by traditional taxi companies, saying they abide by all requirements by tax and administrative authorities in the country.

A Grab taxi logo is seen on a cab in Hanoi, Vietnam. Both Grab and Uber as major ride-hailing firms in Vietnam have rejected as groundless accusations of tax evasion by traditional taxi companies 

In a petition sent to transport authorities, the taxi firm Vinasun complained that Uber and Grab are not subject to any business costs like traditional operators who have to meet at least 13 costly business conditions, although by nature, the ride-hailing service providers are also offering taxi services like traditional ones.

Vinasun also said Uber and Grab evade tax by resorting to electronic passenger transport contracts instead of paper-based ones. Therefore, Vinasun suggested that Uber and Grab services be reconsidered.

Uber and Grab have immediately played down such accusations, saying that they do not perform quasi-taxi services to evade tax, nor resort to electronic contracts to dodge financial obligations, because the two have paid full taxes as per requirements.

Uber Vietnam said it has been fulfilling all tax obligations with Vietnam’s competent agencies and strictly follows guidance from the taxman. Uber Vietnam has been declaring and paying taxes on behalf of the Netherlands-based Uber B.V., and discount revenues as tax sums payable by individuals in accordance with tax rules.

As such, Vinasun’s accusations that Uber avoid tax and fee obligations are groundless and untrue, the company said.

Dang Viet Dung, managing director of Uber Vietnam, asserted that Uber services should not be categorized as a taxi service since by nature the two are different.

Transport service providers using mobile phone apps offered by Uber to connect drivers and passengers should be considered as those entities performing transport services on a contractual basis, he said.

Uber also disagreed with Vinasun, saying the company was not governed by prevailing regulations. Since the issuance of the license for launching the pilot service, Uber has forwarded notices to the transport departments of Hanoi and HCMC, and had working sessions with such departments to ask for guidance. Uber has also regularly forwarded reports on its operations to the departments.

Similarly, Grab Vietnam said it was working closely with Vietnam’s tax agencies and adhere to all regulations in this matter.

A noteworthy point in Vinasun’s petition is that Uber and Grab have randomly used “super discount” and “super-cheap” as well as subsidies for drivers as irregular competition tricks to cripple traditional taxi operators. This point, in fact, has been mentioned several times by other taxi operators, who demanded that Uber and Grab fares be registered with authorities like traditional taxi firms.

At this argument, Grab Vietnam said all its promotion programs have been registered with the Departments of Industry and Trade. Therefore, the accusation that is performed random promotions is baseless, Grab Vietnam said.

Vinasun said that due to the unhealthy competition, as many as 4,239 drivers at the company quit jobs in the first quarter this year, while 300 taxicabs of its fleet stayed idle due to the problem. Such a situation can send the company to bankruptcy, Vinasun said.

Commenting on this, Grab Vietnam said the poor business performance of Vinasun was due to many factors, such as the changing market conditions, the changing commuting habit of customers, and the corporate governance, among others. Such negative factors cannot be blamed on competitors, it said.

Grab Vietnam also said that in the past, when expanding business, Vinasun also forced other public transport enterprises out of the market due to the tough competition.

SGT