Decree 10 paves way for Grab and other ride-hailing firms to begin official operation

08:00 | 05/04/2020
Decree No.10/2020/ND-CP is heralding a new development chapter for the Vietnamese transport industry by opening to the trends of the future. Under the new law, Grab and other tech-based car firms can now select a suitable business model and operate on full legal grounds – on a national scale.
decree 10 paves way for grab and other ride hailing firms to begin official operation
The opportunity to become an official transport business enterprise would help Grab bring multiple benefits to its customers

United mindset important to drive progress of transport technology

When deploying Decree No.10/2020/ND-CP on car transport business, the Ministry of Transport (MoT) as the body helping the government compile and execute this important legal document, has a thorough grasp of the document for enforcement in practice. Several localities, however, do not properly understand the document, leading to inadequate enforcement and confusing businesses.

Some localities assumed that it is time for ride-hailing firms to stop the trial period. Some others thought these car firms need to operate by the same rules as taxis. Some even believe it is time to encourage drivers of tech-based transport firms to shift into other modes of operation after the pilot project for tech cars ended following the enforcement of Decree 10 from April 1, 2020.

The pilot project for tech-based cars was implemented following Decision 24/QD-BGTVT dated January 7, 2016, which allowed ride-hailing cars to operate in Ho Chi Minh  City, Hanoi, Danang, Khanh Hoi, and Quang Ninh. 

These thoughts do not align with the intentions and actions of the government and the MoT.

The articles of Decree 10 make significant headway towards solidifying the legal basis of ride-hailing firms and defining their role and position in the local transport market.

In the past, there were no different concepts about tech-based car operations. Now this business form has been somewhat legalised, with moves to accept their participation in transport operation, for instance.

The decree consists of clear regulations on using software for booking or cancellation, fare calculation or connection with customers through electronic devices, thus acknowledging the existence and official operation of new modes of transport like tech car firms.

Furthermore, it accepts the e-contract concept which is applied by ride-hailing business, providing better fundaments.

Simultaneously, the Decree refers to transport connection support software which provides connection protocols between transport business units, between drivers and passengers or transport service leasers. These connections all take place in the digital environment.

The MoT has given instructions to businesses providing transport connection software like Grab, Be, and Fast Go to ensure the smooth implementation of Decree 10. In light of Article 35 of Decree 10, these businesses will have the following two options to choose.

In the first option, they only provide transport connection services, which means they could not directly operate cars and decide rates. 

In the second option, they can handle at least one of the main tasks in transport activities for the purpose of turning profit.

In the words of Tran Bao Ngoc, head of the Transport  Department under the Ministry of Transport, units providing transport connection support software need to select the suitable business mode for their business to ensure compliance with Decree 10. This means Grab and other ride-hailing apps can only begin official operations, continuing providing jobs to driver-partners and serving their existing customer base, once they have selected a mode.

Stopping trial run, Grab begins official operation

With progress in diverse areas, Decree 10 would pave the way to modernise transport and the operation of ride-hailing firms like Grab.

With diverse progresses, Decree 10 would pave the way to modernise transport and the operation of ride-hailing firms like Grab.

The decree’s apparent progress lay the fundament for Grab’s long-term, official operation in a healthy business environment. This legal base enables Grab to begin official operation in Vietnam instead of operating under a trial scheme as in the past.

A representative from Grab said that the new decree would not bring major changes to the company’s existing operations as it solidifies the legal grounds for them without requiring major alterations.

In the near term, one small change is that all GrabCar vehicles will need to have three stamps: a sign applied to contract-based cars stuck to the front windshield, a co-operative logo on the door, and the GrabCar stamp inside the front windshield. GrabBike service will operate based on Decree No.52/2013/ND-CP on e-commerce by the Ministry of Industry and Trade, the representative noted.

As the time for compliance with these requirements is from July 1, 2020, Grab believes it will have sufficient time for careful preparation.

Grab driver-partners and customers, therefore, need not worry of interruptions to normal services like vehicle booking, GrabFood, or shipping on the Grab platform as all will continue unchanged with the usual promotion policies.

Customers to benefit from healthy competition

The new decree is expected to put an end to the long-lasting dispute between traditional and tech-driven taxis. All service will be transparent under the management of state management agencies. Using stamps would help Grab keep track of its fleet, resolving the problem of cars operating illegally which has been plaguing the company for a long time.

Grab’s driver-partners will still have a stable job and the opportunity to raise their income leveraging the company’s platform and policies.

The opportunity to become an official transport business would help Grab bring multiple benefits to its customers.

Particularly, the greatest beneficiaries of increased transparency in Grab’s operations will be the customers as their safety would be better assured when Grab can fully manage its fleet in operation. Service quality would then improve, and customers will find it easier to spot Grab cars.

Decree 10 also enables Grab to expand its service across the country, as with this clear legal basis, there will be no geographical restrictions to its operations.

The Grab representative affirmed, “Our company’s operating principle is ensuring maximum benefits for the customers and driver-partners in total adherence to the law and striving for the community’s sustainable development.”

By Huy Sang

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional

Based on MasterCMS Ultimate Edition Ver 2.9 2020