Hanoi taxis fear bankruptcy in light of proposed regulation
Taxis operate outside My Dinh National Stadium in Hanoi. Photo: Tuoi Tre
The Hanoi Taxi Association has voiced strong opposition to a proposed regulation that it says could result in bankruptcy for local taxi companies.
The Department of Transport of Hanoi is asking for public feedback on a proposal calling for stricter regulations on taxi operations throughout the capital.
Among other stipulations, the new regulation would require a uniform look be adopted by all cabs in the Vietnamese capital by 2025.
The regulation would also force local taxicab companies to register themselves to specific operating zones – either within the city’s urban districts or in rural areas – and ban taxis registered in one zone from picking up passengers in another.
However, a new look and defined operation zones are not what have cab companies fuming. The most controversial of all items listed in the draft is the establishment of a common control center for all taxi companies in Hanoi.
“After the establishment [of the central control center], companies that refuse to join and use the center will have their radio frequency disabled by the municipal Authority of Radio Frequency Management,” the draft reads.
According to the Hanoi Taxi Association, such a center would require as many as 500 employees and a board of managers, “we’re unclear whether or not the city will cover the costs for the center.”
Additionally, the association pointed out that forcing companies to share a common control center would be extremely wasteful to those who have already invested heavily in their own modern control centers.
As for the division of operating zones, the Hanoi Taxi Association said the plan is not feasible and would serve no actual purpose, considering most taxi companies operate in both urban and rural areas.
Not allowing taxis to pick up passengers outside of their registered zone would only increase operating costs for taxi companies, the association pointed out.
According to Do Quoc Binh, chairman of the Hanoi Taxi Association, increased government involvement in private companies would set the business environment in Hanoi back to the days of a subsidized economy and deal a direct blow to the current market economy.
“Therefore, we worry that if the regulation is adopted it will generate enough liability to drive Hanoi’s taxi companies to the verge of bankruptcy,” Binh said.
According to the chairman, there are around 20,000 drivers in Hanoi operating as contractors with Uber and Grab.
Backed by parent companies based outside of Vietnam, Uber and Grab are able to offer fares low enough to control half Hanoi’s taxi market share, Binh wrote in a letter to the municipal Department of Transport.
“This has pushed taxi companies to the brink of bankruptcy. Revenues have dropped by 50-60 percent, with tens of thousands of drivers quitting or being put out of their jobs,” Binh added.
By Tuoi Tre News