Hanoi (VNA) - The TransportMinistry has declined to approve a Uber Vietnam request to pilot an IT upgradefor its services, citing, among other things, a lack of authorisation andvalidation from its parent firm.

In an indication of regulatory obstacles thatstand in the way of companies using ridesharing apps that people can use tohire transportation in major cities around the world, the ministry said UberVietnam had not met several conditions for regularising its operations in thecountry.

A similar application by Uber’s rival, GrabCar,has been approved.

An official document sent to the company bythe ministry said the authorisation given to Uber Vietnam by Holland-based Uber International Holding BV(Uber BV),which provides the smartphone application for Uber services, was insufficient.

It said Uber Vietnam was presenting itself asthe developer and applicant of the test launch with Uber BV having no legally bindingresponsibility in project implementation.

Furthermore, the registered fields ofoperation in Uber Vietnam’s initial business certification are “managerialactivities” and “market research”, that has no relation to any actionauthorised by Uber BV.

If Uber Vietnam is developer of the ITcomponent and wants to apply it, it has to add this activity to its list ofregistered operations, according to the Ministry.

Also, as the party directly responsible forsigning and implementing the project, Uber Vietnam should work with othercommercial transportation units and provide these and their direct clients(drivers) with the necessary contracts.

The ministry also said that under thenation’s e-commerce laws, the Uber mobile application has the same function asan electronic exchange. Therefore, the company needs to register its serviceswith the Ministry of Industry and Trade.

Regarding Uber Vietnam’s use of electroniccontracts and data instead of traditional paper contracts, the ministrydemanded more details and analysis on the content and process before approvingthe project.

In particular, the pilot project must clarifyUber’s rights and responsibilities as a supplier of technological applicationsand transportation services. This includes the authorisation given by Uber BV to Uber Vietnam,as also the resolution of any legal issues that arise during the latter’soperations.

The ministry’s communiqué said it could notapprove Uber Vietnam’s request before the company satisfies all the conditionsmentioned therein. It said this was required so that the company would notcontinue working with vehicle owners and other transportation units incontravention of regulations.

The project under which Uber has soughtapproval is officially titled “Application of information technology insupporting the management and connection of commercial passenger transportationby contract.”

The project’s stated aim is to enhance Statemanagement of information technology-based passenger transportation, and createpreconditions for future science and technology application projects in thetransportation sector.

Uber entered Vietnam in June 2014 as aforeign company operating in the country without resident offices. The companyhas undergone previous scrutiny by the Government on matters of tax avoidanceand its legality in the country.-VNA