The Transport Ministry says that Uber’s operation in Vietnam is illegal while the San Francisco-based ride-sharing service maintains it simply wants to increase safety and reduce traffic congestion.
“Uber’s operation is a violation of the Traffic Law and government requirements for transport services,” said Deputy Transport Minister Nguyen Hong Truong at a press conference in Hanoi on Monday (December 1).
Uber uses a smart phone application to arrange rides between passengers and drivers.
Customers use the app to request rides and track their reserved vehicle's location.
The ministry has requested the Ministry of Information and Communications check the legality of Uber’s software being used in Vietnam.
It also asked the Ministry of Finance to inspect Uber’s duties and issue fine it for any violations.
The Ministry of Public Security was also asked to inspect drivers who joined the service and crack down on individuals and entities who supply Uber's software.
Inspectors from the Ho Chi Minh City Transport Department organized an Uber sting of sorts, on Friday morning when they fined at least five drivers for operating an unlicensed taxi business.
Uber launched in Ho Chi Minh City, its second Asian city after Hong Kong last June.
The company's arrival in Vietnam pitted it against the Malaysian GrabTaxi app, which began operating here in February.
At the press conference, Deputy Transport Minister Truong said they were acting on complaints filed by the HCMC Taxi Association.
According to Vu Ngoc Bao, director of the Transport Department under the ministry, many residents prefer Uber due to convenience and lower prices.
“However, this is an unhealthy business practice and should be properly managed,” he said.
Meanwhile, Uber posted a statement on its blog on November 29 in response to the raids.
The statement alleged that Uber offers a “safer, more reliable and convenient transportation option.”
It said that the service has seen “overwhelming support and demand has been off the charts in record time."
The controversial company couched its business in rather lofty terms.
“We want to keep Ho Chi Minh City moving forward in a way that increases safety and reduces congestion,” it said.
Riders and drivers use Uber to move about in 250 cities around the world, the company maintains.
“Uber is bringing something fresh and new to a sector that has been characterized by stagnation… Unfortunately, champions of the status quo want to limit your transportation options. They are preventing HCMC from moving forward,” the company claimed.
Uber insisted that it is compliant with relevant laws in Vietnam.
“We do not own, operate vehicles or employ drivers. Our platform simply connects a rider’s request to a partner from a licensed, for-hire chauffeur-driven transportation company,” it said.
“We look forward to meeting with local authorities to discuss how we can work together to help transform and modernize the country’s transportation in line with other ‘smart cities’ around the world.”