Hanoi (VNA) - Grab has explained whythe company decided to increase the percentage it took from the fares ofGrabBike and GrabExpress services since the beginning of this year.

The company started collecting a share of 23.6percent of GrabBike and GrabExpress fares from January 1, an increase of 3.6percentage points, which was opposed by drivers.

Nguyen Trung Thanh, manager of GrabBike andGrabExpress, said the increase was not a revenue-sharing policy of Grab toraise the fee the company collected from its partner drivers. Instead, theincreased share was the tax amount the company declared and contributed to theState budget on behalf of the drivers following guidance from the tax authority.

Accordingly, Grab Vietnam helped collect threepercent of value-added tax and 1.5 percent of individual income tax on itspartner drivers’ share of 80 percent of the total fare, which was equivalent to3.6 percent of the total revenue. 

The tax collection was only applicable to driverswho earned a revenue of 100 million VND (4,380 USD) a year, Thanh said.

In 2016-17, Grab Vietnam used its budget to paytaxes for drivers to support its partner motorbike drivers.

Grab entered Vietnam in February 2014 with a legalcapital of 20 billion VND, but posted an aggregated loss of more than 938billion VND.

Its total revenue in 2014-16 was 1.755 trillionVND, and the company paid more than 142 billion VND in taxes to the Statebudget during the period.

In August last year, Grab increased the percentageit took from fares from 15 percent to 20 percent.

With the increase in the share Grab collected,together with reductions in support policies of the company and harshcompetition as the number of drivers grew, the income of Grab drivers hassignificantly decreased.-VNA