Uber taxi, which has appeared in Ha Noi and HCM City, has stirred controversial idea about its operation. – Photo thoibao.vn

(Biz Hub) – Uber is a ride-sharing taxi service that uses a smart phone application to facilitate negotiations for rides between vehicle drivers and commuters.

Customers use the app, which appeared recently in HCM City and Ha Noi, to request for rides and track their reserved vehicle's location.

The service has stirred controversy and debate about its legitimacy. Tran Bao Ngoc, head of the Ministry of Transport's transport department, discusses the issue with Transport Newspaper.

This taxi service installs the Uber app on smartphones. Could you explain more about this service?

This is a new taxi service that connects commuters and vehicle drivers. Vehicles providing Uber net service have neither signboard nor logo nor meter. Passengers use the Uber app to register the route they want to take, and the system connects them to an available vehicle. The system will inform customers about the cost of the journey and basic information about the car that will pick them up. If the customers agree to use the service, their Visa or Mastercard will be charged for it. This kind of service is cheaper than that of an ordinary taxi, with 20 per cent of the profit going to the Uber manager and 80 per cent to vehicle owners.

The business poses potential risks to the State budget, the taxi enterprises that are fully registered with the State management body and the driver.

Could you clarify the potential risks that the business may cause?

The Uber net managers and drivers contact each other through the Internet. They might not know each other and are not responsible for each other's actions. Let's imagine a case in which a driver transports a commuter with heroin or trafficking in goods. If the case is detected by police, the driver will have to take legal responsibility for transporting banned goods since he or she has no evidence to prove his or her innocence.

On the other hand, there exists unfair competition between registered taxi enterprises and Uber.

Enterprises that register to provide taxi service have to pay taxes and meet regulations on transport provisions such as recruiting qualified drivers and ensuring appropriate policies for drivers and staff, including periodical health checks, health insurance and social insurance. It's natural for taxi enterprises to expect healthy competition. In contrast, Uber service neither registers for nor obeys the mentioned regulations.

Some people argue that Uber is convenient for users and cheaper than the ordinary taxi, so it deserves to receive support and encouragement to develop and hence, create competition. What is your comment on this?

Uber provides cheap taxi because it fails to pay taxes and does not have to invest to meet the legal requirements of transport service supply. As I said before, there exists unfair competition between a registered business and a non-registered one, so there is no basis to compare these two services.

What kinds of regulations should be imposed on this type of business?

Transportation service is a conditional business that should protect the legitimate rights of the business, customers, drivers and the State, in terms of tax loss. Businesses like Uber are not regulated by law, so it has potential risks. In addition, it will be difficult for police and inspectors to monitor their operations, thereby affecting passenger security and causing tax losses to the State budget.

Given the limitations of the business and petition of the HCM City Taxi Association, the Ministry of Transport has asked the Ministry of Public Security to intensify inspection of the business and fine people who provide taxi service but fail to meet regulations on transport service supply. The Ministry of Finance has been asked to study possible taxes that can be imposed on Uber service, and the Ministry of Information and Communication has been asked to inspect the legitimacy of the country's Uber software application. – VNS