Ride hailing app company Uber has reportedly said it will set up a legal entity in Vietnam to implement its pilot service in the country after the local transportation ministry rejected the proposal.
The US transport tech firm will revise its proposal to re-submit to the ministry within weeks.
Uber’s move in Vietnam comes barely weeks after it announced that it will set up a corporate entity in Indonesia as opposed to functioning through representative offices.
The proposed programme was supposed to be transportation connection services through technology application, but as there was currently no legal framework for it, Uber would modify as transportation supporting services, Dang Viet Dzung, general manager of Uber Vietnam, told the Zing News.
Vietnam’s transport ministry said, it returned Uber’s proposal because the company had stated in the project that its parent firm, Uber B.V. in Netherlands, would be in charge of dealing contracts with Vietnamese partners, instead of handing the responsibility over to the local unit.
Dzung revealed that Uber will launch a new company in Vietnam to deploy the revised pilot programme.
“Uber Vietnam is a foreign-invested company with the main function of doing market research and consultancy for the parent entity. Its model is not consistent with the project,” the newswire quoted Dzung as saying.
Dzung has again affirmed that Uber Vietnam did not violate the local regulations for transportation, saying that what it is doing in the country is much different from conventional taxi companies, by purely applying new technologies.
Meanwhile, the transportation ministry, through a series of the recent seminars, has said it advocates the use of technology in changing the traditional mode of transportation, and if Uber or Malaysia’s GrabTaxi meet the norms, they can operate the pilot projects.
GrabTaxi Vietnam’s proposal has been approved by the local government in October, as the company connects cars that have “registered” condition with customers. The local government said it will turn on the green light for Uber if it strictly complies with the business registration and tax obligation to Vietnam.
“It is not Uber or GrabTaxi. Any businesses that possess superior technology will create competition. (…) That’s the law of the market,” commented vice minister of transport Le Dinh Tho during a recent press conference.