Uber’s perverse tax avoidance in Vietnam leaves drivers,
passengers with little legal protection
Inside
an Uber car in Ho Chi Minh City. Tuoi Tre
Uber remains the only mobile
application-based transport company in Vietnam to duck business registration
and tax obligations, leaving its drivers and customers with limited legal
protection.
The
Vietnamese Ministry of Transport has recently demanded that the transport
departments of Hanoi and Ho Chi Minh City tighten their grip on contract cars
that employ Internet applications in their operations.
Among the
taxi companies operating in Vietnam that fall under the request’s scope of
effect, including Grab and local taxi operator Vinasun, Uber remains
reluctant to legalize its operation in the Southeast Asian country.
Uber, a
smartphone app originating in the U.S. that allows people to hail a private
car, has been around in Vietnam since June 2014.
The application,
managed by its Netherlands-based parent firm Uber B.V., contracts local car
owners to become its drivers, who use their own vehicles and only have to
share 20 percent of each ride’s fare with the company, with the remaining 80
percent going to their own pockets.
As Uber is
not represented by any legal entity in the country, the Vietnamese government
is losing substantial amounts of tax, while the company’s drivers and
customers have little legal protection.
According to
Le Hoang Minh, deputy director of the Ho Chi Minh City Department of
Transport, his department has made several requests to Uber’s parent firm in
the Netherlands for an online transport contract plan, but to no avail.
Therefore,
Minh said, Uber is not complying with Vietnamese laws when operating its
online transport service, avoiding many requirements of a legal transport
company such as business registration, taxi signs, and in-car journey
recorders.
In
administrative terms, the deputy director continued, Uber is also immune to its
drivers’ actions, such as in the case of an armed robbery last month by a Uber driver in Ho
Chi Minh City, where the company was subject to little to no liability.
Uber has
been avoiding its tax obligations by insisting that they are merely offering
software solutions instead of running a transport service.
In reality,
Minh said, the company is setting its service fee, offering support policies,
and charging customers travel fares like any other transport company.
Uber drivers
are also at their own risk of being out of work without eligibility for any
insurance or welfare program, for their employer is not a registered
business.
Meanwhile,
passengers are subject to less legal protection in the event of a robbery or
assault by an Uber driver, as handling the crime will be a more demanding
task without journey recorders, Minh explained.
Uber fares would not be cheap, if…
If Uber had
been paying its tax and following regulations on conducting taxi business,
its fares would not have been so favorably cheap compared to other services,
said Do Van Thang, general director of Mai Linh Group, a taxi operator in
Vietnam.
In addition,
Thang said, being unregulated by the fixed-price policy which applies to all
registered taxi businesses in Vietnam means that Uber can adjust fares
depending on the hours and traffic, which actually does not make it so cheap
during rush hour.
It creates
unfair competition among similar service providers when Uber can incur lower
operating costs, as the firm does not have any responsibility for the
vehicles and does not have to pay insurance for the drivers either, in
addition to an absence of taximeters, receipt-printing machines, and control
centers.
According to
Ta Long Hy, chairman of the Ho Chi Minh City Taxi Association, the unfair
advantage Uber enjoys can be balanced out by requiring the company to fulfill
tax duties and comply with Vietnamese regulations on offering transport
services.
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Chủ Nhật, 4 tháng 9, 2016
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