The HCM City Department of Transport has ordered all app-based taxi service providers in the city to halt expansion while waiting for a ministry review of the city’s pilot app-based taxi project, which began two years ago.
Tran Vinh Tuyen, vice chairman of the city’s People’s Committee, said the move followed a request from the Transport Department to ask taxi-service providers like Grab and Uber to stop accepting more cars as the number of cars used by app-based taxi services had increased dramatically.
The number of newly registered cars of nine seats or below in the city has increased greatly since early 2016, according to the Transport Department.
With 11,060 traditional taxis operating in the city, the number of cars of nine seats or below for both traditional and app-based taxi services has now reached nearly 35,000.
Of the 35,000 cars, the number of Grab cars totalled 14,100 as of August. Cars used by Uber are not registered with the city.
Under a city plan to develop public transport by taxi, the total number of traditional and app-based taxis should not exceed 14,500 by 2020 and 16,500 by 2025.
As of the end of 2015, the city had only 200-300 traditional taxis running under long-haul contracts (longer trips to other provinces and cities), but the number of all long-haul taxis soared to 2,437 early 2016, when the pilot app-based taxi service began.
The recent increase in the number of cars used by app-based taxi services has worsened traffic congestion, according to experts.
Tuyen has urged the Transport Department to work with the Ministry of Transport to finalise the review of the pilot app-based taxi scheme and submit it to the city People’s Committee.
Tuyen has also consulted with the city’s Tax Department about taxes imposed on traditional taxi and app-based taxi service providers like Grab and Uber, among others.
He demanded that information be transparent to avoid complaints between traditional taxi firms and app-based taxi service providers.
A number of traditional taxi businesses have complained about Grab and Uber’s failure to fulfill tax obligations while enjoying many incentives, according to reports in local media.
Dr Vu Anh Tuan, director of the Viet Duc Transport Research Centre, said the pilot project had helped reduce the number of empty vehicles on the road and limited the demand for personal vehicles, but that the number of cars used by app-based services should now be limited to ease traffic congestion.
“No specific assessment has been made of whether Uber or Grab is the cause of congestion, but road infrastructure in HCM City is overloaded, so the pressure will become greater unless the number of vehicles is controlled,” he said.
Le Trung Tinh, chairman of the HCM City Inter-provincial and Tourism Coach Association, also agreed with the move to halt app-based taxi service expansion, saying the increasing number of vehicles had worsened congestion.
Tinh said the issue was also partly caused by state management agencies, especially the city Transport Department and the Ministry of Transport, which had been slow in taking action and giving appropriate guidance.
The halt to expand the number of cars for each app-based taxi service was just a short-term solution, Tinh said.
In the long run, the city needs to develop a general plan for public transport development while allowing all types of transport to exist, he added.
Dr Pham Sanh, a transport specialist, said the management of app-based taxi services like Grab and Uber was difficult as there were many obstacles in managing this type of service as well as traditional taxis.
The proposal to halt the number of cars was appropriate, but he said it was only a temporary solution.
When the pilot project ends early next year, the city should have specific plans and directions for the development of app-based taxi and traditional taxi services, according to Sanh.
The city’s Transport Department said it would provide a list of registered vehicles used by app-based taxi services to HCM City Police to help them with identification and inspections. — VNS