The Ministry of Transport has proposed revoking regulations that require transport businesses to have a minimum number of vehicles according to the type of transport service they have registered to provide.

The proposal was made in a draft to amend Decree 86/2014/ND-CP on conditions for auto transportation business, which is being circulated for opinion contributions.

Under Decree 86 issued on September 2014, enterprises or cooperatives which provide taxi services must have at least 50 cars if they operating in some “special” cities or at least 10 ones in other cities and provinces.

Companies that provide transportation services for goods and passengers under contracts and undertake the transport of tourists by vehicles for a distance of over 300km must have at least 10 vehicles if they have offices based in central cities and at least five if their offices are located in other localities.

Many experts said the regulations are unnecessary and irrational as they hinder the participation of small enterprises, thereby making the market less competitive.

Also under the decree, a taxi is not allowed to operate for more than eight years in special urban areas and 12 years in other localities.

The draft amendment states that a taxi is not allow to be used for over 12 years regardless of the place of operation.

Deputy Minister of Transport Le Dinh Tho said currently, more than 70 per cent of transport businesses are small scale, but the current regulations do not create a healthy competitive market or a foundation for companies to improve service quality.

In addition, the regulations are also setting barriers for the implementation of other plans such as projects that allow transport companies to bid for operation licences on some fixed routes or bus routes.

The ministry also proposed repealing the regulation that requires companies to register transport business if they have to purchase trucks to transport goods.

Under the draft document, many other business conditions, such as the provision that enterprises and cooperatives sign labour contracts and pay social and health insurance for employees, have also been removed because these obligations are already stated under the Insurance Law and Labour Code.

The ministry has proposed to add a new article that allows operators to use software to connect the operator, drivers and passengers instead of relying on the company’s traditional central dispatch systems.

This regulation will support the operation of Uber and Grab Taxi in Viet Nam and electronic contracts will be legalised.

The ministry hopes the new draft will help to better manage transportation firms and encourage firms to invest in technology and improve their services. — VNS