Uber Vietnam CEO resigns amid growing competition

Hanoi (VNS/VNA) - Uber Vietnam has confirmed that CEO Dang Viet Dung stepped down from his post on October 1 after three years of running the ride hailing service firm in the country.

Information on the reason for Dung’s departure or the new CEO has not been disclosed, till date.

The company said it will still operate normally in the country.

Dung’s departure comes at a time when Uber is struggling with a numerous challenges, including tax scrutiny by the authorities and increasingly harsh competition in the tech-driven transportation market in the country with a population of more than 90 million.

Besides the crisis faced by Uber globally, Uber Vietnam, which reportedly has four million users, is faced with complaints from users and objections from drivers following a decision to increase transportation fees from 7,000 VND (0.3 USD) to 8,500 VND per kilometre in August, together with an increase from 20 percent to 25 percent in the amount it collected from drivers.

In September, the HCM City Tax Department decided to collect 67 billion VND in tax arrears from Uber Vietnam, which triggered a rumour that Uber has ceased operation in the country. However, the company immediately denied the rumour.

Services of Uber in Vietnam include UberX, Uber SUV, UberBlack, uberMoto and uberDelivery.

Uber entered Vietnam along with Malaysia-based Grab, which received massive funding from SoftBank Group Corp. and China’s ride behemoth Didi Chuxing.

With a more “localised” development strategy in Vietnam, which was evaluated to be more suitable to the demand of a majority of Vietnamese users, Grab pushed aggressively in Vietnam and won significant market share over Uber.

In addition, Indonesia’s first billion-dollar startup Go-Jek is reported to be looking to expand its ride-hailing services in three to four countries in Southeast Asia. While the targeted countries are not specified, Vietnam is anticipated to be among Go-Jek’s preferred countries

The penetration and aggressive expansion of tech-driven transport services firms in Vietnam ended up pushing traditional taxi firms into a lot of difficulties, who called for more intensified management measures against Uber and Grab.

Traditional taxi firms said the rapid increase in the number of Uber and Grab vehicles is creating pressure on the country’s transport infrastructure, which is already overloaded, and causing tax losses to the State budget.

Traditional taxi firms said they face unfair competition from tech-driven firms, calling on passengers to use their services as they pay taxes to the Government budget.

Recently, the Hanoi Taxi Association proposed to stop the implementation of a pilot project to apply technology in passenger transportation, adding that Uber and Grab vehicles have outnumbered 50,000 in the country. The association also estimated that Uber and Grab send some 36 trillion VND (1.58 billion USD) abroad each year, causing losses in tax collection.

A representative from the Ministry of Transport, however, said there are no grounds to ban the operation of Uber and Grab in the country. Businesses are allowed to do anything that the laws do not ban, and this is fair competition.

Regarding reports of tax evasion by Uber, the ministry said that the company must pay taxes in line with established regulations.-VNA/VNS