I. Introduction:

On January 17, 2020, the Prime Minister Nguyen Xuan Phuc officially signed a new Decree 10/2020/ND-CP on business and business conditions for transportation by auto (“Decree 10) replacing the Decree 86/2014/ND-CP (“Decree 86”). The Decree 10 consists of 07 chapters and 37 articles providing new regulations for the issuance and revocation of permit for auto transportation business, required signs and tokens, safety regulations, etc. for auto. The auto transportation business is a big industry and right now this industry is more active than ever with many new business forms and types, especially the fast-expanding e-hailing business model – the grey area that is still causing a lot of confusion for many people. Thus a detailed and updated legal mechanism for the auto transportation business at the moment is of great concern.

II. New points in Decree 10:

 Some of the most important changes in the Decree 10 are as follows:

1. A more inclusive definition for “transportation business by auto”

Under Decree 86, transportation business by auto is only defined as “the use of auto to transport goods or passengers on road for profits; includes transport business with direct and indirect money collection”. Under this definition, it is controversial whether automobile ride-hailing platforms (e.g., GrabCar, beCar, etc.) are categorizable as an auto transportation business or they are just imtermediaries providing tools for the auto transportation process.

However, with the new Decree 10, automobile ride-hailing platforms connecting automobile transport business entities and passengers will also be clasified as entities conducting transport business by auto since pursuant to Decree 10, doing transportation business by auto is defined as the act of “conducting at least one of the main steps of transportation activities”, which are either “directly operating the vehicles, chauffeurs or determining the transport fares”, in order to “transport passengers or goods on road for profits”.

2. “TAXI” Lightbox: no more compulsory

Under Decree 10, taxies doing passenger transport business might not have to have roof lightbox with the word “TAXI” installed. Instead, taxies, both traditional and electronic, can choose between installing lightbox highlighting the word “TAXI” on their roof and putting decals made of reflective materials bearing the word “TAXI” on the front and rear window of the auto.

3. Digital platforms

For taxies using digital platforms to book, cancel rides or calculate ride fares, Decree 10 requires that:

  • These taxies have electronic devices directly connected with passengers to book or cancel rides;
  • Ride fares are calculated based on the distance shown on the digital map; and
  • Digital platforms for taxies must ensure compliance with the Law on electronic transactions; must have their interfaces bearing the names or logos of the transport business entities; and must provide passengers with basic information of the names of the transport businesses, full names of the chauffeurs, the vehicle registration plates, the itineraries, the travel distance (kilometers), total payment and telephone number for customer service.

4. More cameras to be installed

Before July 1, 2021, auto for passenger transport business with a capacity of 09 seats (including the driver) or more, containers and trailers must have cameras installed that can record and store images inside the vehicles during traffic. Recordings must be of least 24 latest hours for autos with itinerary up to 500km and of at least 72 latest hours for autos with itinerary of more than 500km. Recordings might be provided, upon request, to the police, traffic inspectors and licensing agencies, ensuring transparency and fair public supervision. With this provision, many auto transportation businesses would need to make great effort and investment in equiping their autos with new supervising cameras.

5. Local Identity for auto

Decree 10 also states that in case where a passenger transport business auto has more than 70% total operating time in a month in any locality, a local badge must be obtained. An auto’s total operating time is determined from data collected from the auto’s monitoring device. So far there has not been any specific definition in terms of “locality”, this lack of definition can be problematic in enforcing this provision. This provision is unprecedented and shall need further guidance from the competent authority to be effectively implemented.

III. Conclusion:

To ensure the implementation of Decree 10, on February 12, 2020, the Ministry of Transport issued the Decision No. 146/QD-GTVT on stopping the pilot plan of deploying technological application in managing and supporting contracted passenger transportation activities from April 1, 2020.

Accordingly, entities offering digital platforms for “electronic taxi” must proactively apply for appropriate business lines and conform with all the requirements as prescribed in Decree 10. Furthermore, for autos with the capacity of 09 seats or less (including the driver) that have already been granted badges for contracted cars, badges have to be re-obtained in accordance with the new regulations. The termination of Decision No. 24/QD-GTVT is neccesary, ensuring the consistency in the application of Decree 10 in practice.

This new Decree 10 is likely to affect a significant number of transportation autos on the market for its great change in definitions and additional requirements. Operating businesses as well as future investors should take into account the Decree 10 to prepare for their businesses and stay compliant with the law. The Deree 10 also promises easier management of the auto transportation business for the State. This decree shall take effect from April 1, 2020.


DISCLAIMER

This LBN newsletter are NOT legal advice. Readers are advised to retain a qualified lawyer, should they wish to seek legal advice. VCI Legal are certainly among those and happy to be retained, yet VCI Legal is not to be hold responsible should any reader choose to interpret/apply the regulations after reading this LBN without engaging a qualified lawyer.