CEO of Uber Vietnam resigns amidst crisis

21:19 | 05/10/2017
The consecutive resignation of executives, including the co-founder, CEO in London, and CEO in Vietnam, adds to the crisis that the ride-hailing giant has been going through, floundering from internal troubles to external threats like gender inequality at the workplace and legal issues with the authorities.
Uber employees protesting the company's poor management policies

CEOs taking flight

In October 1, Uber’s Vietnamese branch confirmed a vacancy for the CEO position, which formerly belonged to Dang Viet Dung, whilst the company has to grapple with troubles from the government and customers, according to newswire Cafef.

“The way Uber operates is that each branch in a country functions as an independent startup, forcing each unit to up the ante if they want to survive the competition,” Dung said.

Uber Vietnam has not provided any further information regarding the next CEO to be appointed. The position is currently empty.

Dung left the CEO seat after three years. Before heading back to Vietnam to embark on the career path of ride-hailing services, Dung was just another college dropout from Harvard Business School.

In early October, the CEO in charge of the operations in London, Jo Bertram, announced her resignation right before the company’s meeting with Transport for London in an attempt to get the firm’s licence back.

Jo was the executive director of the company in London, in charge of operations in the United Kingdom, Ireland, Belgium, the Netherlands, and Luxembourg.

“An exciting new opportunity has arisen that will allow me to apply what I have learnt here and I will be able to share more details with you soon,” she informed the staff.

Earlier in June, according to The Guardian, Uber co-founder Travis Kalanick resigned from the position of CEO. This resignation was followed by six months of coping with scandals, including the case of a former employee publicly posting about gender inequality, gender discrimination, and sexual harassment at the workplace. Travis was requested to take a step back from the CEO position by investors.

Recently, Travis surprised the business world by appointing Ursula Burns, former CEO and chairwoman of Xerox, and John Thain, former CEO of Merril Lynch and the New York Stock Exchange, as new directors of Uber.

Travis’ appointment without unanimous consent saw substantial dispute. However, addressing the unexpected addition to the management board, the company’s spokesperson noted that the firm is in urgent need of a new management board that is capable and experienced to handle the crisis despite the sudden change in the board of directors.

Crisis after crisis

2017 has so far been a rough patch for Uber, highlighted by legal matters and competition with Grab.

Last month, the entire Internet enclave was filled with rumours that Uber would shut down after the company’s operation in London were stopped.

Only a month ago, the company was alleged to evade tax payments. The total amount of tax Uber dodged should be significant, considering the giant daily earnings of roughly VND1 billion ($440,000) reported in January.

In late September, the Ho Chi Minh City Department of Taxation ordered Uber to pay a total of VND66.8 billion ($2.94 million) in taxes arrears, giving the company ten days to settle the payment. The official order was announced as the outcome of an inspection from the date of starting its operation up until June, 2017.

Nguyen Nam Binh, deputy director of the Ho Chi Minh City Department of Taxation, told Vnexpress that the firm agreed with the authorities’ findings, with the exception of the corporate income tax.

As explained, the company legally operates as an online application, rather than a taxi service provider. Therefore, it is not obligated to pay taxes as a business entity.

The tax department collected merely VND20 billion ($879,234) per year from the 31,000 Uber and Grab cars, whilst conventional taxi-hailing firms must pay an annual average VND2 trillion ($91.7 million) in tax from 30,000 vehicles.

Circular No.63/2014 on providing for operation and management of automobile transport and services to road transport

Section 6, Article 47

“A passenger transport contract is signed between a transport company and an organisation/individual who wishes to hire a whole trip of the vehicle. The transport company shall sign only one passenger transport contract for a trip.”

Earlier, the Ministry of Transport (MoT) rejected the carpooling services proposed by both Uber and Grab for the second time as the Law on Road Traffic only permits one contract served per trip, thereby, any addition would be a violation of the policy.

Meanwhile, according to newswire Deal Street Asia, Go-Jek, Indonesia’s first billion-dollar startup in motorbike and taxi hailing services, is seeking to penetrate a potential market like Vietnam as cash remains the major existing payment method of the country.

The firm’s digital payment service was a movement for Go Jek’s scheme to penetrate new markets, especially cash-predominant markets like the Philippines, Thailand, and Vietnam.

Go Jek’s entrance to Vietnam would toughen competition with ride-hailing giants, such as Grab and Uber.

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By By Sam Luong

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