The ride-sharing app’s proposal to expand its GrabTaxi service to new cities throughout the nation was rejected by officials.
Transport authorities said because Grab remains in its trial period and has not fulfilled all business requirements, it cannot move into new regions of the country, as reported by Tuoi Tre. GrabTaxi is a separate product by the company that connects users with idle taxi drivers. This is different from GrabCar which involves private drivers.
The company wanted to offer taxi services in the Mekong Delta, Central Highlands and south-central regions. It currently operates in Hanoi, Da Nang, Ho Chi Minh City, Khanh Hoa Province and Quang Ninh Province.
In addition to successfully completing its trial period, before Grab can get approval to expand, officials noted the need for vehicles to have registration stickers on their windshields and the company must pay taxes as well as demonstrate transparency and fairness in competition. It is not clear if to what degree Grab already satisfies these requirements.
Grab is pushing back against the ruling when it comes to its GrabTaxi services. Because it facilitates standard taxi services, Grab claims that part of its operation should be allowed to operate nationwide.
This setback in Grab’s quest for national domination comes alongside an ongoing investigation into the legality of its acquisition of Uber earlier this year. The Vietnam Competition Authority’s (VCA) investigation began on May 18 and could last up to 300 days. Authorities must be notified of all mergers and acquisitions that result in a company gaining over 30% of a market share and any that give a single company more than 50% are restricted.
Grab is also currently at odds with Saigon officials over taxes related to the merger. The city’s tax department is seeking VND53 billion (US$2.31 million) in back taxes and tax evasion from Uber, according to VnExpress. Grab has stated it will not pay Uber’s taxes, which the government claims it is responsible for.
[Photo via Bao Moi]
