The impacts of global economic sharing on vietnamese enterprises

Nội dung text: The impacts of global economic sharing on vietnamese enterprises

1. THE IMPACTS OF GLOBAL ECONOMIC SHARING ON VIETNAMESE ENTERPRISES Nguyen Huu Tan1* Abstract: Although the sharing economy started in Vietnam later than in the world, with the appearance of Uber, Grab, and Airbnb, it has been developing at an astounding pace and becoming popular among users. In recent years, there have been many new global companies investing and operating in Vietnam as a form of sharing economy. Sharing economy enterprises bring both opportunities and threatsfor Vietnam. They make the challenges for Vietnamauthorities to manage the activities of these companies. This paperanalyses the nature, characteristics and impacts of sharing economy in Vietnam. It alsomentions the problems and recommends some solutions to manage activities of sharing economy enterprises. Keywords:Opportunity, threat, effects, policy, sharing economy, Vietnam. 1. INTRODUCTION A few years ago, there is an appearing of a new kind of business in Vietnam. It is known as a kind of sharing economy which is the result of the Industrial Revolution 4.0 happening around the world. Sharing economy enterprises make business basing on the applications of information technology. Originally growing out of the opensource community to refer to peer-to-peer based sharing of access to goods and services, the term is now sometimes used in a broader sense to describe any sales transactions that are done via online markets, even ones that are business to business (B2B), rather than peer-to-peer. In Vietnam, there are many famous international brands of sharing economy enterprises such as Grab, Agoda, Goolge, Facebook,Airbnb, etc. The new kind of business has made many changes of using services and goods inVietnam. The operation of sharing economy enterprises is very different from thetraditional business. The price of services is much cheaper than traditional services.Therefore, there are a conflict between the sharing economy enterprises and traditionalones. The problem is related to the equal competition in business. Moreover, thisnew kind of business has created many new challenges for policy and legal makers ofVietnam as well as the administration and management of the government. The governmentmust have issued new legal documents to guide the operation and activities of sharingeconomy enterprises. Therefore, in this paper, I willanalyze in detail the effects of sharing economy enterpriseactivities in Vietnam as well as recommend some solutions to improve the situation. 2. LITERATURE REVIEW 2.1. Understanding about sharing economy The sharing economy is an economic model often defined as a peer-to-peer (P2P) based activity of acquiring, providing or sharing access to goods and services that are facilitated by a community based on- line platform. Communities of people have shared the use of assets for thousands of years, but the advent * Faculty of Corporate Finance, Academy of Finance.
2. 666 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA of the Internet -and its use of big data - has made it easier for asset owners and those seeking to use those assets to find each other. This sort of dynamic can also be referred to as the shareconomy, collaborative consumption, collaborative economy, or peer economy. Sharing economies allow individuals and groups to make money from underused assets. In this way, physical assets are shared as services. Take for instance car sharing services like Lyft and Uber. According to data provided by the Brookings Institute, private vehicles go unused for 95% of their lifetime. The same report detailed Airbnb’s cost advantage over the hotel space as homeowners make use of spare bedrooms. Airbnb rates were reported to be between 30-60% cheaper than hotel rates around the world. The sharing economy may take a variety of forms, including using information technology to provide individuals with information that enables the optimization of resources through the mutualization of excess capacity in goods and services. A common premise is when information about goods is shared (typically via an online marketplace), the value of those goods may increase for the business, for individuals, for the community and for the society in general. 2.2. Related empirical studies Researcher Christopher Koopman, an author of a study by George Mason University economists, said the sharing economy “allows people to take idle capital and turn them into revenue sources”. He has stated, “People are taking spare bedrooms, cars, tools they are not using and becoming their own entrepreneurs”. Sundararajan, a New York University economist who studies the sharing economy told a January congressional hearing that “this transition will have a positive impact on economic growth and welfare,by stimulating new consumption, by raising productivity, and by catalyzing individualinnovation and entrepreneurship”. A study in Inter-economics / The Review of European Economic Policy noted thatthe sharing economy has the potential to bring many benefits for the economy while notingthat this presupposes that the success of sharing economy services reflects their businessmodels rather than “regulatory arbitrage” from avoiding the regulation that affectstraditional businesses. The Harvard Business Review argues that “sharing economy” is a misnomer, and that the correct word for this activity is “access economy”. The authors say, “When “sharing” is market-mediated - when a company is an intermediary between consumers who don’t know each other - it is no longer sharing at all. Rather, consumers are paying to access someone else’s goods or services.” The article goes on to show that companies (such as Uber) who understand this, and whose marketing highlights the financial benefits to participants, are successful, while companies (such as Lyft) whose marketing highlights the social benefits of the service are less successful. 3. RESULTS AND DISCUSSION 3.1. Impact to labor issue Relationship to job loss. Following the information from Vinasun, one of the big traditional taxi companies in Vietnam, from the time when Uber and Grab appeared in Vietnam for 3 years, revenue of Vinasun has decreased 11% and profit down 35%. They have to cut off cars and staff. Therefore, many taxi drivers lost jobs.
3. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 667 Figure 1. Vinasun’s business operation Source: cafef.vn The sharing economy has succeeded in large part because the real economy has been struggling. Specifically, the sharing economy succeeds because of a depressed labor market, in which “lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways,” and that in many cases, people join the sharing economy because they’ve recently lost a full-time job, including afew cases where the pricing structure of the sharing economy may have made their old jobsless profitable (e.g. full-time taxi drivers who may have switched to Uber or Grab). Tools that help people trust in thekindness of strangers might be pushing hesitant sharing-economy participants over thethreshold to adoption. But what’s getting them to the threshold in the first place is adamaged economy, and harmful public policy that has forced millions of people to findodd jobs for sustenance. The recent recession will lead to the expansion of the sharing economy because people could easily employ themselves through the services that these companies offer. However, this concept is only hiding the fact that such employment is only a new face for contractual work and temporary employment that doesn’t provide the necessary safeguards for modern living. 3.2. Impact to tax and legal policy The appearance of sharing economy enterprises made a new challenge for Vietnamese Government. Sharing economy is very new and the Vietnam’s legal system is lack of the provisions to govern activities of these company. The law makers have to update and enact new policy and regulations to govern the activities of sharing economy enterprise. For more detail as follows: To manage the activities of sharing economy enterprises, the authority has discussed and combat so much to decide to admit this kind of economy in Vietnam. The government has permitted these companies operate legally in Vietnam and require them obligate the regulations of Vietnam. When some traditional companies disagree with a new company of sharing economy because they think sharing economy will kill the traditional business, the government had to recommend to legal makers and policy make new laws and change regulations to govern the sharing economy. For example, to collect tax of sharing economy enterprises such as Uber, Grab or Facebook, the ministry of finance must give new accounting tax of enterprise income and individual income tax as well as VAT. This regulation to make the equal competition between the traditional business and sharing economy company. Vietnamese authority is continuing to improve the regulations to manage the sharing economy enterprises better.
4. 668 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA Besides the change of tax policy, Vietnam’s Government also recommends the Parliament amendment Article 292 Code of Criminal 2015. When new Panel Code is enacted, the startup community was very worried because of new provision of Article 292. They feel that regulation will prison all of founders of IT startup. Article 292 has some regulation criminalization some business activities. Therefore, the startup community requires the law maker remove the 292 out of the Penal Code 2015. Before the anti Article 292 very hard, the government had to recommend the Parliament amend the Penal code 2015 although it is just enacted. And this situation makes a new trend and impact directly to process of law making in Vietnam. It creates the democratic regime in law making. 3.3. Impact to the environment Reducing negative environmental impact by reducing the amount of goods needing to be produced which cuts down on industry pollutions (such as reducing the carbon footprint and consumption of resources). In sharing economy, we can share many things such as car, house, etc. When we usethings together, the cost is reduced.Moreover, it helps reduce the use of material such as oil, gas, paper, electric, etc. Therefore, it reduces the CO2 and dust, economy the water, traffic jam, etc. Of course, the pollution of air and water willreduce and improve the quality of environment. Therefore, we can conclude that sharingeconomy impact well and positive to the environment. 3.4. Impact to the price and quality of services Saving costs by borrowing and recycling items provides people with access to goods who can’t afford buying them or have no interest in long-term usage. In Vietnam, the taxi price was very high until Uber and Grab appear. The service price of Uber and Grab is cheaper than traditional taxi but the quality is still better. That is why many people in Vietnam have to change the habit use Uber and Grad service instead of traditional taxi like Vinasun taxi or Mailinh taxi. The influence of price on taxi service is very positive. It requires the traditional taxi company must improve the quality and reduce the price. It is very good for clients and protects the client better because they will have more choice to use the service. In general, the competitiveness of price between the sharing economy enterprise and traditional company is good to develop the economy positively. 4. CONCLUSIONS AND RECOMMENDATIONS The results show that participation in sharing economy is motivated by many factors such as its sustainability, enjoyment of the activity as well as economic gains. The “sharing economy” may not be about sharing but rather about access. Giana Eckhardt and Fleura Bardhi say the “sharing” economy has taught people to prioritize cheap and easy access over interpersonal communication, and the value of going the extra mile for those interactions has diminished. In Vietnam, sharing economy brings many new valuations and makes many new impactions to the people and society. It not only makes benefits to the economy and clients but also challenge to the authority how to manage sharing economy enterprises. It helps to boost the government and Parliament of Vietnam to improve the legal system to cover and govern new kind of economy. When the sharing economy just appears in Vietnam, the authority is confused and passive to manage. Then, they must research about sharing economy and find out some new policy to manage. The lesson is the Vietnam’s leaders need to more active to enact the policy and law that have prediction and vision for the changing economy. If the Vietnam’s authority has a good prediction and vision, they will avoid passive and more active to manage the sharing economy and other issues in society.
5. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 669 REFERENCES: Ha My (2017), Vinasun đang chịu áp lực quá lớn từ Uber, Grab: Phải cắt giảm 300 xe taxi, tự đặt mục tiêu lợi nhuận giảm tới 35%, from . Phạm Huyền (2017), Hé lộ số thuế “còi” của Uber, Facebook, Google nộp cho VN, from . Richard Luecke, Brian J. Hall (2006), Harvard Business Essentials: Performance Management: Measure and Improve the Effectiveness of Your Employees, Harvard Business Press, Brighton, Boston, Massachusetts, USA.