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No causal relation between Grab’s acts and Vinasun’s damages: procuracy
Tuesday,  2/12/2019, 14:55 

No causal relation between Grab’s acts and Vinasun’s damages: procuracy

The Saigon Times Daily

A Vinasun Taxi cab drops off passengers at Tan Son Nhat International Airport in HCMC – PHOTO: TL

HCMC – The ride-hailing firm Grab has been cleared of all charges by the HCMC Superior People’s Procuracy, which declared there is no causal relationship between Grab’s violations, if any, and the local taxi operator Vinasun’s extra-contractual damages.

The higher procuracy has suggested the HCMC Superior People’s Court overturn the first-instance decision of the HCMC People’s Court forcing Grab to pay VND4.8 billion (some US$207,000) to Vinasun in compensation and reject all of Vinasun’s demands.

The lower court made its ruling in December last year that Grab had run afoul of Vietnam’s transport business regulations as it operates as a transport service firm rather than as a tech software provider, and hence must be subject to regulations.

Grab directly engages in a passenger transport service, based on its adjustment of service tariffs, launch of promotions and imposition of penalties on drivers, among other things, while Decision 24/2016 by the Transport Ministry on the pilot scheme for ride-hailing services does not permit these practices, the lower court said.

In addition, Grab had seriously violated the Law on Transport Business, and the firm’s insistence that it only provides technology that connects drivers and riders was baseless, according to the court ruling. As such, Vinasun’s claim that Grab’s violations of the law caused damages to the firm was partially accepted.

However, the higher procuracy argued that the charges were groundless since Grab is a passenger transport firm licensed by the competent authorities under the pilot scheme and in line with the instructions of the prime minister, and its activities do not violate prevailing regulations.

The procuracy has also dismissed the argument that Grab caused Vinasun heavy losses, totaling nearly VND42 billion in lost revenue and other material damage, as one-sided with no practical or legal basis since it was based merely on an assessment by the court-appointed Cuu Long Valuation and Inspection Company.

According to the procuracy, Vinasun’s declines in revenue and profit stem from a large number of factors, such as corporate governance capabilities, the Government’s policies and laws, the market situation, competition between various types of transport businesses and changes in passenger demand.

These factors were not taken into consideration in the assessment by Cuu Long, so Vinasun’s demand for compensation from Grab is groundless, the higher procuracy remarked.

It stressed that Grab’s transport business activities are legal and Vinasun’s declines are partially due to consumers switching to Grab when they found the ride-hailing firm’s services were superior to those provided by Vinasun and other traditional taxi firms.

Vinasun filed the lawsuit against Grab in June 2017, accusing it of abusing the ministry’s pilot scheme for ride-hailing services and committing multiple violations of laws on healthy competition, causing losses for traditional taxi operators such as Vinasun.

According to the Vietnamese firm, nearly 2,800 of its taxicabs had been sitting idle from 2016 to June last year. Grab was supposedly the sole cause of its losses, as the ride-hailing firm has taken over 71% of the local market.

As a result, Vinasun demanded that Grab make a lump-sum payment in compensation for its combined business losses of roughly VND41.2 billion in 2016 and the first half of 2017.

The trial began last February but was adjourned twice to allow for more evidence to be gathered. The lower court finally made its ruling in December, which prompted both Grab and Vinasun to file appeals.

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