Mai Linh has asked for its debts to be frozen for the next 20 years to fight off the threat of imminent insolvency.

Vietnam’s leading taxi company Mai Linh has asked the government to ease its social insurance responsibilities, saying that popular ride-hailing apps are pushing it to the brink of insolvency.

 

The company has sent the request to the legislative National Assembly, Vietnam Social Security and the Ministry of Finance asking to be released from loan interest payments and penalties for social insurance debts.

 

As of the end of October last year, the company owed nearly VND182 billion ($8 million) in workers’ social insurance contributions, it said.

 

The company is asking for its interest and penalties to be frozen for the next 20 years, promising to clear the debt by then and fulfill all its insurance payments from now on.

 

Starting this year, businesses now face criminal responsibility for workers’ social insurance contributions, according to Vietnam’s revised Penal Code.

 

Ho Huy, chairman of the company, said “intense and unfair” competition from Grab and Uber had caused its revenue to drop by 30 percent from previous years.

 

The company, which launched its own ride-hailing motorbike taxi app last year, now only makes enough to cover daily expenses and cannot afford to clear its debts and interest payments, he said.

 

Mai Linh could be driven out of the market soon, leaving its 24,000 drivers jobless, he said.

 

“Without support from government agencies, Mai Linh will go bust very soon,” Huy said in a letter obtained by VnExpress.

 

The company’s communications officer later refused to comment on the issue.

 

A financial report from Mai Linh showed accumulated losses of nearly VND800 billion ($35.2 million), 80 percent of its registered capital, at the end of June 2017. Its workforce has also dropped by 20 percent from late 2016.

 

These figures should raise doubts about its ability to maintain stable operations, according to auditors.

 

Grab and Uber arrived in Vietnam in 2014 and operate both car and motorbike taxi services. The two services have been running on a trial basis since early 2016 and will be officially authorized soon, according to a proposal made by the transport ministry earlier this month.

 

Since their arrival, Vietnamese traditional taxi firms including Vinasun and Mai Linh have repeatedly reported losses and sliding revenues, blaming “unhealthy” competition from the new players.