Articles
New rules for auto-transport business and ride hailing

06/04/2020

The significant growth of ride hailing services in Vietnam has widely been considered a major breakthrough in the transportation industry. Nevertheless, it has not been formally regulated under the current laws of Vietnam and the operation of ride hailing services by cars has caused several obstacles in terms of management.

Seeing this need, on 17 January 2020 the Government promulgated Decree No. 10/2020/ND-CP (“Decree 10”), which came into effect on 1 April 2020 and repeals Decree No. 86/2014/ND-CP dated 10 September 2014 (“Decree 86”) regulating auto transport business and business conditions.

Decree 10 provides a clearer legal framework for ride hailing platforms which associated with automobile transport as distinct from “traditional” auto transport services, and also supplements several requirements which appear to be stricter than those under Decree 86, for the operation of auto transport services.

Differentiation of Ride Hailing Platform Providers and Transportation Service Providers

Decree 10 gives an explicit definition of transportation services via cars (“kinh doanh vận tải bằng xe ô tô” in Vietnamese). It is stipulated as the implementation of at least one of the main stages of transportation operation as follows:

1. directly managing vehicles and drivers which is management by the transportation service providers who assign drivers to perform the passenger/cargo transportation service via one of the following means: (a) application software assisting transport interconnection; (b) the delivery order; (c) the transport service contract or (d) the transport documents); or 
2. determining transportation fares; and 
3. with the aim to transport passengers or goods by road for profit making purposes.

Automobile ride hailing platform providers, which are formally legalized under Decree 10, will only be allowed to provide their digital platforms or software applications for connection activities, and shall be subject to certain restrictions, including not to perform any of the main steps of transportation activities as aforementioned (i.e. directly managing vehicles and drivers, or determining the transportation fares). Otherwise, they may be treated as automobile transportation services providers.

Stricter requirements for business in contract-based passenger transportation

Under Article 7 of Decree 10, for vehicles operated by enterprises doing business in passenger transportation pursuant to contract (“xe ô tô kinh doanh vận tải hành khách theo hợp đồng” in Vietnamese) which are associated with the ride hailing platforms, more requirements are set out by the Government as follows:

(a) Such vehicles shall have a “CONTRACTED VEHICLE” badge fixed to the inside of the windshield, and a badge reading “CONTRACTED VEHICLE” made of reflective material must be publicly attached on the windshield and rear windows of the vehicle with a minimum size of 6 x 20 centimeters; and
(b) Requirement for local badge identity (as detailed below).

Within a month, the number of trips with the same overlapping departure and destination point operated by each vehicle shall not exceed 30% of its total trips.

Requirement for local badge identity

Being new under Decree 10, if an automobile vehicle operated for passenger transport, regardless of whether it is passenger transport per contract or passenger transport by taxi, has more than 70% of total operating time in a month in a locality, a local badge (in such locality) must be obtained. The total operating time shall be determined by way of using the data obtained from its vehicle tracking system.

Installation of cameras on transport vehicles

Prior to 1 July 2021, the following transport vehicles must have cameras installed that may (and it must be ensured that such cameras may) record and store images of the driver (for goods transport vehicles) or the driver as well as the whole length and breadth of the interior of the vehicles (for passenger transport vehicles) during traffic:

(a) Passenger transport vehicles with nine or more seats (including driver);
(b) Vehicles transporting goods by container with a trailer or semi-trailer.

Cameras must be able to maintain records of at least 24 hours for autos with itineraries up to 500km and of at least 72 hours for autos with the itinerary of more than 500km, and must be provided to the competent police departments, traffic inspectors and licensing authorities for the purpose of ensuring transparency and fair public supervision.

Authors

Le Thanh Cong




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