MIDTERM ASSIGNMENT SUBJECT: INTERNATIONAL ECONOMICS THE EMERGENCE OF THE GLOBAL SHARING ECONOMY ENTERPRISES IN VIETNAM: OPPORTUNITIES AND CHALLENGES

TABLE OF CONTENT TABLE OF CONTENT 2 CONTENT 4 I. Introduction 4 1.1. Abstract 4 1.2. Research background, research questions and objectives 4 II. Understanding about sharing economy 5 2.1. The concept of sharing economy 5 2.2. The system of sharing economy 7 2.3. The driving forces behind sharing economy 9 2.4. The impact of the sharing economy on global trade and economics. 11 III. Opportunities and challenges of sharing economy in Vietnam 15 3.1. Overview of Vietnams current sharing economy scenario 15 3.2. Implications of sharing economy in Vietnam 24 IV. Conclusions and recommendations for further research 32 REFERENCES 35 2 LIST OF FIGURES AND TABLES Figure 1. Redistribution markets (Botsman 2010) 7 Figure 2. Product service systems (Botsman 2010) 8 Figure 3. Collaborative lifestyle (Botsman 2010) 8 Figure 4. The percentage of people who use the internet from 2006 to 2014 10 Figure 5. Smartphone users and penetration worldwide (eMarketer 2014) 10 Figure 6. Vinasun Data (Unit: Billion VND) 12 Figure 7. Vietnam’s Political Map (Britannica.com) 17 Figure 8. Key figures of Vietnam (General Statistics Office 2020; IMF 2020) 18 Figure 9. Households with computers per 100 households 20 Figure 10. Number of mobile phone subscribers per 100 inhabitants 21 Figure 11. Internet users per 100 inhabitants 21 3 CONTENT I. Introduction 1.1. Abstract For about five years recently, sharing economy has drawn increasing attention from researchers and business people worldwide. The rapid growth of this sector derives from the incredible rise of technology in the 4.0 industrial revolution. Vietnam as well as other developing countries are considered an ideal environment for this model to develop. As a result, there have been many new global companies investing and operating in Vietnam as a form of sharing economy such as Uber, Grab, Foody, Agoda, Facebook, Google,.. However, this new kind of business has also created many new challenges for policy and legal makers of Vietnam as well as the administration and management of the government. The government must have issued new legal documents to guide the operation and activities of sharing economy enterprises. This paper will analyze the nature, characters and impacts of sharing economy in Vietnam. It also mentions the problems and since then, the study further recommends some possible policies to manage activities of sharing economy companies. Key words: sharing economy; benefit; challenge; impactions; Vietnam; policy 1.2. Research background, research questions and objectives 1.2.1. Research background Almost 20 years after the World Wide Web was introduced, it is difficult to imagine the world without it. The evolution of concepts such as the economy has been on a constant pace since the 1970s. As a result, new terms such as the sharing economy, the digital economy, and collaborative consumption have been coined to describe the changes in society. The sharing economy, for instance, was widely believed to have started during the financial crisis of 2008. Due to its relative novelty, the concept has garnered a lot of attention. However, its fast changing nature and lack of transparency have also caused it to be subject to much debate. The sharing economy has disrupted various industries, most significantly in the 4 accommodation industry (Airbnb), shared mobility (Grab, Uber), financial services (Sachmann and Alt), and logistics (Puschmann and Alt 2016). Also, it has been able to expand and globalize at an astonishing rate due to its assetlite model. 1.2.2. Research questions and objectives Considering the discussed gap in literature, this paper aims to investigate what driveforces lead to the emergence of sharing economy enterprises in Vietnam and how Vietnamese government policies have made an influence on it. Hence, we ask the research question: What are the opportunities and challenges of the emergence of the global sharing economy enterprises in Vietnam? To answer the research question, we engaged in both quantitative and qualitative methods. Thus, while this research can provide valuable insights on operations, study of the nonobservable elements on consumer behaviors, such as attitude and motives, can offer additional insights into factors influencing the observable behavior, and thus help validating quantitative models. This researchinprogress paper is structured as follows. Section 2 provides an overview of the sharing economy and related literature. Section 3 presents the opportunities and challenges of sharing economy in Vietnam. Finally, section 4 presents the preliminary discussion and recommends feasible solutions so that we can effectively take advantage of this economic model. II. Understanding about sharing economy 2.1. The concept of sharing economy For decades, communities of people have shared the use of assets, but the Internet and its development of big data has made it simpler for asset owners and those wishing to utilize those assets to reach one other. This is also known as the sharing economy, collaborative economy, collaborative economy, or peer economy, which refers to a hybrid market model of peertopeer trading (in between ownership and giftgiving). The sharing economy is an umbrella terminology with a variety of meanings that is frequently used to represent economic and social activities including internet 5 transactions. As a result, the phrase sharing economy has been criticized as deceptive, with some claiming that even systems that facilitate peertopeer trading might be predominantly profitdriven. Many critics, however, argue that the word is still legitimate as a way of expressing a more democratized economy, even when applied to a larger range of services. According to Belk (2007), sharing is the act and process of distributing what is ours to others for their use andor the act and process of getting or taking something from others for our use. There are two sorts of sharing that we may see in our daily lives: ‘sharing in’ and sharing out’. Sharing in refers to the act of sharing made out of compassion or civility towards other people, or the act of sharing that occurs mostly amongst close individuals such as family and friends (Belk 1988 Belk 2013). According to Belk (2014), the idea of sharing out refers to the act of splitting something among strangers, whether it be space, products, expertise, or jobs. It does not happen regularly, and it is most likely a onetime occurrence. Sharing can also entail lending or borrowing, which results in the creation of debts or bonds. When someone lends anything out, they expect the object or something of equal value to be repaid by the borrower. Sharing can also apply to giftgiving, which is the transfer of ownership of an object, and marketplace trading, often known as a reciprocal exchange (Belk, 2014). The sharing economy may take many forms, including the use of information technology to supply individuals with knowledge that enables resource optimization through the mutualization of spare capacity in commodities and services. Individuals and groups can profit from unused assets by participating in sharing economies. Idle assets, such as parked automobiles and spare beds, can be rented out in a sharing economy while not in use. Physical assets are thus shared as services in this manner. A frequent idea is that when information about commodities is shared (often through an online marketplace), the value of those items may improve for the business, individuals, the community, and society as a whole. Sharing economy, in other words, can be called collaborative consumption. According to Belk, collaborative consumption entails people coordinating the purchase and sharing of a resource for a price or other nonmonetary compensation. Compensation in this case may be anything of equal worth. Sharing a vehicle seat, a place in an apartment, a meal, or the exchange of products are all examples of this. Many 6 internet sharing services or social networks, such as YouTube, Facebook, Instagram, and others, are not considered collaborative consumption. These platforms also provide peertopeer services; but, because there is no money involved, they do not embody the notion of collaborative consumption. Because it is a permanent transfer of ownership, the notion of collaborative consuming also removes the scenario of giftgiving. (Belk, 2014). As a result, the notion of collaborative consumption is a subset of the sharing concept discussed above. It is a form of payment for sharing. Belk (2014) refers to it as “pseudosharing,” arguing that the sharing label is used to acts that are actually “shortterm rental activities”, such as ridesharing or accommodationsharing. 2.2. The system of sharing economy According to Botsman and Rogers (2010), the sharing economy is categorized into three systems: product services systems, redistribution markets, and collaborative lifestyles. 2.2.1. Redistribution markets The redistribution market system is built on used or preowned items being passed on from one person who does not want them to another person who does. Instead of being thrown, preowned items might be reallocated to where they are needed. They can be traded for money, virtual points for future purchases, or other things of the same sort of value. When opposed to the old buy more and buy new theories, one evident advantage of redistribution markets is that it encourages the reuse and resale of items while maximizing capacity and reducing inefficiency and waste. (Botsman Rogers 2010). Redistribution markets, according to Botsman and Rogers (2010), might be the fifth R in the sequence – reduce, recycle, reuse, repair, and now, redistribute. Figure 1. Redistribution markets (Botsman 2010) 7 2.2.2. Product service systems Productservice systems (PSS) are business concepts that enable the delivery of products and services in tandem. PSS models are emerging as a way to promote collaborative consumption of both products and services with the goal of achieving proenvironmental results. The figure below depicts the concepts behind productservice systems. Instead of each car giving benefits to a single person, each vehicle may now provide utility to several people, eliminating waste and pollution (Botsman 2010). This strategy allows consumers to have access to the value that the items provide without having to possess them. It is especially beneficial when it comes to items with high idle capacity, such as vehicles, CDs, DVDs, and so on, in terms of extending their life and capacity. The schemes also benefit users by releasing them of the duty and weight of owning, say, a car – the purchase of the car, repairing expenses, insurance, maintenance, road taxes, and so on – allowing them to make the most out of what they own. (Botsman Rogers 2010) Figure 2. Product service systems (Botsman 2010) 2.2.3. Collaborative lifestyles Figure 3. Collaborative lifestyle (Botsman 2010) 8 Collaborative lifestyles are communitybased platforms that enable users to participate in monetized transactions for services or accessibility to resources such as capital or skills via social peertopeer systems. People with comparable wants or interests come together to mutualize and exchange not just physical items, but also intangible goods such as time, working space, interests, and so on in these systems. Firms that provide these services can also exist on a worldwide scale, with consumers engaging in peertopeer financing on the offending clubs and peertopeer travel on Airbnb, I Like Local, and so on (Botsman Rogers 2010.) The advancement of mobile technology provides a foundation for enabling locationbased GPS technology as well as realtime sharing. Since sharing involves interpersonal interactions rather than merely exchanging things and property, this system of collaborative consumption necessitates a higher and stronger feeling of trust and connectivity. 2.3. The driving forces behind sharing economy The sharing economy is driven by three market forces: societal, economic, and technological drivers (Owyang 2013). This section will discuss these driving forces in detail. 2.3.1. Economic driving forces The rapid development of advanced technology has fueled the growth of the sharing economy. Companies have been using technology to create platforms for people to connect with each other and facilitate transactions worldwide in a seemingly effortless way. (Finley 2013.) Owyang (2013) found out in his research that 27 out of the most successful sharing companies are using online payment systems. Furthermore, there is an increasing percentage of the world’s population who now have access to high technology (internet.org 2014). The following figure shows the percentage of the global population that is connected to the internet over years worldwide.

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS

_

MIDTERM ASSIGNMENT

SUBJECT: INTERNATIONAL ECONOMICS

THE EMERGENCE OF THE GLOBAL SHARING ECONOMY ENTERPRISES IN VIETNAM: OPPORTUNITIES AND CHALLENGES

TABLE OF CONTENT

TABLE OF CONTENT 2

CONTENT 4

I Introduction 4

1.1 Abstract 4

1.2 Research background, research questions and objectives 4

II Understanding about sharing economy 5

2.1 The concept of sharing economy 5

2.2 The system of sharing economy 7

2.3 The driving forces behind sharing economy 9

2.4 The impact of the sharing economy on global trade and economics 11

III Opportunities and challenges of sharing economy in Vietnam 15

3.1 Overview of Vietnam's current sharing economy scenario 15

3.2 Implications of sharing economy in Vietnam 24

IV Conclusions and recommendations for further research 32

REFERENCES 35

2

LIST OF FIGURES AND TABLES

Figure 1 Redistribution markets (Botsman 2010) 7

Figure 2 Product service systems (Botsman 2010) 8

Figure 3 Collaborative lifestyle (Botsman 2010) 8

Figure 4 The percentage of people who use the internet from 2006 to 2014 10

Figure 5 Smartphone users and penetration worldwide (eMarketer 2014) 10

Figure 6 Vinasun Data (Unit: Billion VND) 12

Figure 7 Vietnam’s Political Map (Britannica.com) 17

Figure 8 Key figures of Vietnam (General Statistics Office 2020; IMF 2020) 18

Figure 9 Households with computers per 100 households 20

Figure 10 Number of mobile phone subscribers per 100 inhabitants 21

Figure 11 Internet users per 100 inhabitants 21

as well as other developing countries are considered an ideal environment for thismodel to develop.

As a result, there have been many new global companies investing andoperating in Vietnam as a form of sharing economy such as Uber, Grab, Foody,Agoda, Facebook, Google, However, this new kind of business has also created manynew challenges for policy and legal makers of Vietnam as well as the administrationand management of the government The government must have issued new legaldocuments to guide the operation and activities of sharing economy enterprises

This paper will analyze the nature, characters and impacts of sharing economy inVietnam It also mentions the problems and since then, the study further recommendssome possible policies to manage activities of sharing - economy companies

Key words: sharing economy; benefit; challenge; impactions; Vietnam; policy 1.2 Research background, research questions and objectives

The sharing economy, for instance, was widely believed to have started duringthe financial crisis of 2008 Due to its relative novelty, the concept has garnered a lot

of attention However, its fast changing nature and lack of transparency have alsocaused it to be subject to much debate

The sharing economy has disrupted various industries, most significantly in the

accommodation industry (Airbnb), shared mobility (Grab, Uber), financial services(Sachmann and Alt), and logistics (Puschmann and Alt 2016) Also, it has been able toexpand and globalize at an astonishing rate due to its asset-lite model.

1.2.2 Research questions and objectives

Considering the discussed gap in literature, this paper aims to investigate whatdriveforces lead to the emergence of sharing economy enterprises in Vietnam and howVietnamese government policies have made an influence on it Hence, we ask theresearch question:

What are the opportunities and challenges of the emergence of the global sharing economy enterprises in Vietnam?

To answer the research question, we engaged in both quantitative andqualitative methods Thus, while this research can provide valuable insights onoperations, study of the non-observable elements on consumer behaviors, such asattitude and motives, can offer additional insights into factors influencing theobservable behavior, and thus help validating quantitative models

This research-in-progress paper is structured as follows Section 2 provides anoverview of the sharing economy and related literature Section 3 presents theopportunities and challenges of sharing economy in Vietnam Finally, section 4presents the preliminary discussion and recommends feasible solutions so that we caneffectively take advantage of this economic model

II Understanding about sharing economy

2.1 The concept of sharing economy

For decades, communities of people have shared the use of assets, but the Internet

- and its development of big data - has made it simpler for asset owners and thosewishing to utilize those assets to reach one other This is also known as the sharingeconomy, collaborative economy, collaborative economy, or peer economy, whichrefers to a hybrid market model of peer-to-peer trading (in between ownership andgift-giving)

The sharing economy is an umbrella terminology with a variety of meanings that is frequently used to represent economic and social activities including internet

transactions As a result, the phrase "sharing economy" has been criticized asdeceptive, with some claiming that even systems that facilitate peer-to-peer tradingmight be predominantly profit-driven Many critics, however, argue that the word isstill legitimate as a way of expressing a more democratized economy, even whenapplied to a larger range of services.

According to Belk (2007), sharing is "the act and process of distributing what isours to others for their use and/or the act and process of getting or taking something fromothers for our use." There are two sorts of sharing that we may see in our daily lives:

‘sharing in’ and 'sharing out’ 'Sharing in' refers to the act of sharing made out ofcompassion or civility towards other people, or the act of sharing that occurs mostlyamongst close individuals such as family and friends (Belk 1988 & Belk 2013).According to Belk (2014), the idea of 'sharing out' refers to the act of splitting somethingamong strangers, whether it be space, products, expertise, or jobs It does not happenregularly, and it is most likely a one-time occurrence Sharing can also entail lending orborrowing, which results in the creation of 'debts' or 'bonds.' When someone lendsanything out, they expect the object or something of equal value to be repaid by theborrower Sharing can also apply to gift-giving, which is the transfer of ownership of anobject, and marketplace trading, often known as a reciprocal exchange (Belk, 2014)

The sharing economy may take many forms, including the use of informationtechnology to supply individuals with knowledge that enables resource optimizationthrough the mutualization of spare capacity in commodities and services Individualsand groups can profit from unused assets by participating in sharing economies Idleassets, such as parked automobiles and spare beds, can be rented out in a sharingeconomy while not in use Physical assets are thus shared as services in this manner Afrequent idea is that when information about commodities is shared (often through anonline marketplace), the value of those items may improve for the business,individuals, the community, and society as a whole

Sharing economy, in other words, can be called collaborative consumption.According to Belk, collaborative consumption entails people coordinating the purchaseand sharing of a resource for a price or other non-monetary compensation Compensation

in this case may be anything of equal worth Sharing a vehicle seat, a place in anapartment, a meal, or the exchange of products are all examples of this Many

internet sharing services or social networks, such as YouTube, Facebook, Instagram,and others, are not considered collaborative consumption These platforms alsoprovide peer-to-peer services; but, because there is no money involved, they do notembody the notion of collaborative consumption Because it is a 'permanent transfer ofownership,' the notion of collaborative consuming also removes the scenario of gift-giving (Belk, 2014) As a result, the notion of collaborative consumption is a subset ofthe sharing concept discussed above It is a form of payment for sharing Belk (2014)refers to it as “pseudo-sharing,” arguing that the 'sharing' label is used to acts that areactually “short-term rental activities”, such as ride-sharing or accommodation-sharing.

2.2 The system of sharing economy

According to Botsman and Rogers (2010), the sharing economy is categorizedinto three systems: product services systems, redistribution markets, and collaborativelifestyles

2.2.1 Redistribution markets

The redistribution market system is built on used or pre-owned items being passed

on from one person who does not want them to another person who does Instead of beingthrown, pre-owned items might be reallocated to where they are needed They can betraded for money, virtual points for future purchases, or other things of the same sort ofvalue When opposed to the old "buy more" and "buy new" theories, one evidentadvantage of redistribution markets is that it encourages the reuse and resale of itemswhile maximizing capacity and reducing inefficiency and waste (Botsman & Rogers -2010) Redistribution markets, according to Botsman and Rogers (2010), might be thefifth R in the sequence – reduce, recycle, reuse, repair, and now, redistribute

Figure 1 Redistribution markets (Botsman 2010)

2.2.2 Product service systems

Product-service systems (PSS) are business concepts that enable the delivery ofproducts and services in tandem PSS models are emerging as a way to promotecollaborative consumption of both products and services with the goal of achievingpro-environmental results

The figure below depicts the concepts behind product-service systems Instead

of each car giving benefits to a single person, each vehicle may now provide utility toseveral people, eliminating waste and pollution (Botsman 2010) This strategy allowsconsumers to have access to the value that the items provide without having to possessthem It is especially beneficial when it comes to items with high idle capacity, such asvehicles, CDs, DVDs, and so on, in terms of extending their life and capacity

The schemes also benefit users by releasing them of the duty and weight ofowning, say, a car – the purchase of the car, repairing expenses, insurance,maintenance, road taxes, and so on – allowing them to make the most out of what theyown (Botsman & Rogers 2010)

Figure 2 Product service systems (Botsman 2010)

2.2.3 Collaborative lifestyles

Figure 3 Collaborative lifestyle (Botsman 2010)

Collaborative lifestyles are community-based platforms that enable users toparticipate in monetized transactions for services or accessibility to resources such ascapital or skills via social peer-to-peer systems People with comparable wants orinterests come together to mutualize and exchange not just physical items, but alsointangible goods such as time, working space, interests, and so on in these systems.Firms that provide these services can also exist on a worldwide scale, with consumersengaging in peer-to-peer financing on the offending clubs and peer-to-peer travel onAirbnb, I Like Local, and so on (Botsman & Rogers 2010.) The advancement ofmobile technology provides a foundation for enabling location-based GPS technology

as well as real-time sharing Since sharing involves interpersonal interactions ratherthan merely exchanging things and property, this system of collaborative consumptionnecessitates a higher and stronger feeling of trust and connectivity

2.3 The driving forces behind sharing economy

The sharing economy is driven by three market forces: societal, economic, andtechnological drivers (Owyang 2013) This section will discuss these driving forces indetail

2.3.1 Economic driving forces

The rapid development of advanced technology has fueled the growth of thesharing economy Companies have been using technology to create platforms for people

to connect with each other and facilitate transactions worldwide in a seemingly effortlessway (Finley 2013.) Owyang (2013) found out in his research that 27 out of the mostsuccessful sharing companies are using online payment systems Furthermore, there is anincreasing percentage of the world’s population who now have access to high technology(internet.org 2014) The following figure shows the percentage of the global populationthat is connected to the internet over years worldwide

Figure 4 The percentage of people who use the internet from 2006 to 2014

According to the graph above, almost 40% of the world population is now connected

to the internet This figure is 76,2% in developed countries and 29,8% in developingcountries In addition, the number of smartphone users has been growing steadily overthe years In 2014, around 1,31 billion people own a smartphone and this number ispredicted to go up to 1,64 billion in 2015 and finally reach up to one-third of theworld’s population in 2018 (internet.org 2014.) The following figure presents thenumber of smartphone users and penetration from 2013 to 2018 (estimated) Theamount of smartphone users has been and is estimated to increase steadily over time

Figure 5 Smartphone users and penetration worldwide (eMarketer 2014)

Social networks have enabled people to connect freely and communicatedirectly, changing the way we behave, making us more willing to share our lives toothers and at the same time, more tolerant towards others’ stories When peoplebecome used to sharing online, there is a likelihood that they will feel morecomfortable with sharing in the offline world (Jain 2013)

2.3.2 Social driving forces

That the global population is rising is a fact as 4,3 babies are born every secondsomewhere in the world (CIA 2015) and people are living longer due to better livingconditions (NIA et al 2011) It is expected to reach up to 9,6 billion by 2050 (UN2013b) Rapid population growth leads to diminishing natural resources as we arewitnessing nowadays Gansky (Gansky 2010) describes the situation “Simple mathsuggests that in order to have a peaceful, prosperous, and sustainable world, we aregoing to have to do a more efficient job of sharing the resources we have.” In addition,the ongoing urbanization will add millions of people to big cities (UN 2014).According to the UN's report, around 54 percent of the world’s population is living inurban areas as of 2014; this number back in 1950 was 30 percent and in 2050 will be

66 percent (UN 2014) The denser the population in big cities, the more likely it willfacilitate the need for resources and the growth of the sharing economy (Finley 2013)

Another societal factor that drives the sharing economy is the ‘widespreaddesire for community’ (Finley 2013) Consumers in the Facebook age often seek toengage in a community or a ‘rich social experience’ (Gansky 2010) rather than dealingwith ‘faceless brands’ (Finley 2013) They are becoming more and more interested ingetting to know the people behind every transaction they make (Finley 2013)

2.3.3 Technological driving forces

The economic recession in 2008 has resulted in the sky-high unemployment rate.Consequently, consumers were forced to make do with less (Stephany 2015) They havestarted to look for ‘what makes them happy and how to best access what they want andneed’ (Botsman 2011) By gaining access to the resource, there is no need to pay for thecost of ownership hence giving them more flexibility (Botsman & Rogers 2010) This is agolden time for the sharing economy Many organizations such as Airbnb (2015b), Uber(2015a), TaskRabbit (2015a), etc were launched to seize the opportunity Not only dothese businesses offer a solution for people to save but also provide them with a wholenew way of making money out of the things and talents they possess

2.4 The impact of the sharing economy on global trade and economics.

2.4.1 Impact to labor issue

Relationship to job loss Following the information from Vinasun, one of thebig traditional taxi companies in Vietnam, from when Uber and Grab appeared inVietnam 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 their jobs.

Figure 6 Vinasun Data (Unit: Billion VND)

The sharing economy has succeeded in large part because the real economy hasbeen struggling Specifically, in the magazine's view, the sharing economy succeedsbecause of a depressed labor market, in which "lots of people are trying to fill holes intheir income by monetizing their stuff and their labor in creative ways," and that inmany cases, people join the sharing economy because they've recently lost a full-timejob, including a few cases where the pricing structure of the sharing economy may

have made their old jobs less profitable (e.g full-time taxi drivers who may have

switched to Uber or Grab) The magazine writes that "In almost every case, what

compels people to open up their homes and cars to complete strangers is money, not

trust Tools that help people trust in the kindness of strangers might be pushinghesitant sharing-economy participants over the threshold to adoption But what'sgetting them to the threshold in the first place is a damaged economy, and harmfulpublic policy that has forced millions of people to look to odd jobs for sustenance

2.4.2 Circumventing labor protection law(s)

Economy wrote about the debate over the status of the workers within the sharingeconomy, whether they should be treated as contract workers or employees of the

companies This issue seems to be most relevant among sharing economy companiessuch as Uber The reason this has become such a big issue is that the two types ofworkers are treated very differently Contract workers are not guaranteed any benefitsand pay can be below average However, if they are employees, they are grantedaccess to benefits and pay is generally higher The State of California is trying to goafter Uber and make them pay a fine to compensate workers fairly The CaliforniaPublic Utilities Commission was working on a case that "addresses the sameunderlying issue seen in the contract worker controversy – whether the new ways ofoperating in the sharing economy model should be subject to the same regulationsgoverning traditional businesses" Like Uber, Instakart too had to face similar lawsuits.

In 2015, a lawsuit was filed against Instakart alleging the company misclassified aperson who buys and delivers groceries as an independent contractor [100] Instakarthad to eventually make all such people as part-time employees and had to accordbenefits such as health insurance to those qualifying This leads to Instakart havingthousands of employees overnight from zero Benefits not accrued evenly

2.4.3 Impact to tax and legal policy

The appearance of sharing economy enterprises made a new challenge forVietnamese Government Sharing economy is very new and the legal system ofVietnam lack of the provisions to govern activities of these companies The lawmakers have to update and enact new policy and regulations to govern the activities ofsharing economy enterprises For more detail as following:

To manage the activities of sharing economy enterprises, the authority hasdiscussed and combat so much to decide to admit this kind of economy in Vietnam Thegovernment has permitted these company operate legally in Vietnam and require themobligate regulations of Vietnam When some traditional company disagree with newcompany of sharing economy because they think sharing economy will kill the traditionalbusiness, the government had to recommend to legal maker and policy make new law andchange regulation to govern the sharing economy For example, to collect tax of sharingeconomy enterprises such as Uber, Grab or Facebook, the ministry of finance must givenew accounting tax of enterprise income and individual income tax as well as VAT Thisregulation 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.

Besides the change of tax policy, Vietnam’s Government also recommend theParliament amendment Article 292 Code of Criminal 2015 When new Panel Code isenacted, the start-up community was very worried because of the new provision ofArticle 292 They feel that regulation will prison all founders of IT startups Article

292 has some regulation criminalization of some business activities (trade) Therefore,the startup community requires the law maker to remove the 292 out of the Penal Code

2015 Before the anti-Article 292 was very hard, the government had to recommendthe Parliament amend the Penal code 2015 although it was just enacted This situationcreates a new trend and directly impacts the process of law making in Vietnam Itcreated the democratic regime in law making I think this is a good and positive impact

of sharing economy on Vietnam

2.4.4 Impact to the price and quality of services

Saving costs by borrowing and recycling items Providing people with access togoods who can't afford buying them or have no interest in long-term usage InVietnam, the taxi price before very high until Uber and Grab appear The service price

of Uber and Grab is cheaper than traditional taxis but the quality is still better This iswhy many people in Vietnam have change the habit use Uber and Grab service instead

of traditional taxi like Vinasun taxi or Mai Linh taxi The impact of price on taxiservice is very positive It requires the traditional Taxi companies must improve thequality and reduce the price It is very good for clients and protect the client betterbecause 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 todevelop the economy positively

2.4.5 Impact on economic growth and restructuring

Up to now, because there are no official statistics on the CS economy, it is difficult

to quantify the contribution of the CS to economic growth and restructuring However, itcan be seen that the different types of communist economy have the effect of promotinggrowth and improving the efficiency of the economy Developing various types of publichousing contributing to income for economic entities engaged in business, therebyincreasing income for a part of the population, contributing to increase

domestic savings, increase asset accumulation, create capital accumulation to increaseinvestment in the economy Not only the parties participating in the CS model benefit,but the CS model also creates a spillover effect and brings additional income for manyrelated economic actors For example, connecting and participating in the network viathe Grab platform not only brings income to over 100,000 motorbike drivers, but alsobrings income to thousands of food and beverage store owners and sellers onlineconsumption…

As a new business model, KTCS has focused on exploiting the advantages ofthe Internet and digital technology to form and develop many new business fields, newindustries and products with high technology content Besides creating great pressure

on traditional industries, not only promoting competition, but also promoting internalrestructuring of economic sectors in the direction of shifting from inefficient industries

to more efficient ones As a result, CS can promote economic restructuring toindustries with high technology content, innovate growth models, and improve thegrowth quality of the economy

However, a number of main economic models developed rapidly, invasivelyand disrupted the traditional economic structure, creating certain losses to thetraditional economy When the CS economy develops faster in traditional fields andindustries, the larger and faster the broken traditional economic structure will be, themore this loss of value of the traditional economy will increase issues of job creation,income and social security assurance for workers in the traditional economic sector

III.Opportunities and challenges of sharing economy in Vietnam

3.1 Overview of Vietnam's current sharing economy scenario

For nearly five years, there has been a new kind of business in Vietnam It isknown as a kind of sharing economy This is the result of the Industrial Revolution 4.0happening around the world Sharing economy enterprises make business based on theapplications of information technologies Originally growing out of the open sourcecommunity to refer to peer-to-peer based sharing of access to goods and services, theterm is now sometimes used in a broader sense to describe any sales transactions thatare done via online markets, even ones that are business to business (B2B), rather thanpeer-to-peer

In Vietnam, there are many famous international brands of sharing economyenterprises We can call them Uber, Grab, Agoda, Google, Facebook, Airbnb,… Thenew kind of business has made many changes in using services and goods in Vietnam.The operation of sharing economy enterprises is very different from the traditionalbusiness The price of services is much cheaper than traditional services Therefore,there is a conflict between the sharing economy enterprises and traditional enterprises.The problem is related to the equal competition in business Moreover, this new kind

of business has created many new challenges for policy and legal makers of Vietnam

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

This chapter will give an overview of the country of Vietnam and its key figures aswell as analyze the country’s macro environment by using the PESTEL analysis method.PESTEL stands for Political, Economic, Social, Technological, Environmental and Legalfactors News, statistical data and legal information is taken from online newspapers, legaldocuments, government and international organizations’ reports

3.1.1 The country of Vietnam

Vietnam or officially the Socialist Republic of Vietnam is a country located inSouthEast Asia, on the Indochina peninsula The country is bordered by the Gulf ofThailand and the South China Sea (CIA 2021) or the Eastern Sea as called by Vietnamitself It is 331,236 square kilometers in area and has a population of approximately97,582.7 million people as of 2020 (General Statistics Office 2020) The neighboringcountries include Cambodia to the South West, Laos to the North West and China tothe North (CIA 2021)

Figure 7 Vietnam’s Political Map (Britannica.com)

The capital of Vietnam is Hanoi, also known as the political center, located inthe northern part of Vietnam The economic center of Vietnam is Ho Chi Minh City,formerly called Saigon, located in the southern part of the country There are 63provinces and five municipalities, namely, Hanoi, Hai Phong, Da Nang, Ho Chi MinhCity and Can Tho (Governmental Portal 2021a)

The country’s official language is Vietnamese, written in romanized alphabet.Along with Vietnamese, other languages, which are spoken by other minor ethnicgroups are Thai, Mong, Muong, Khmer, Tay, Nung, Chinese, etc (CIA 2021) In thepast, when Vietnam was colonized by France, French was spoken by the upper class as

a second language However, as of now, English is becoming more and more popular,taught as a compulsory subject in almost every school

To sum up, some of key figures for Vietnam, retrieved from the StatisticalYearbook of Vietnam (General Statistics Office 2020) and IMF (IMF 2020), can befound in the table below:

Official name Socialist Republic of Vietnam

National language Vietnamese

Area 331,236 square kilometers (2020)

Population 97,582.7 million (2020 est.)

GDP $271.2 billion (2020 est.)

GDP per capita $2,779 (2020 est.)

Figure 8 Key figures of Vietnam (General Statistics Office 2020; IMF 2020)

3.1.2 PESTEL analysis of Vietnam

This subchapter will study the macroenvironment of the Vietnamese market byusing the PESTEL analyzing model All the six factors will be discussed in detail andtailored towards their impacts on the application of the sharing economy in the market

a Political factors

The Socialist Republic of Vietnam is one of the five remaining single-communistparty states in the world together with China, North Korea, Cuba and Laos (Rosenberg2020) The Communist Party of Vietnam officially came into authority on 2, September

1945 in the North and expanded to the South, at that time was a Capitalist State, on 30April 1975 (Governmental Portal 2021b) The Communist Party keeps the politicalenvironment relatively stable since there have been few riots The most recent and seriousevent was the violent anti-China protest that burnt down several factories due to China’sdeployment of its oil rigs in the convicted waters happening in summer 2014 in somemajor cities (BBC 2014) Other than that, the government tries to dismiss most people’sprotests which leads the author to the point of freedom of speech According to theHuman Right Watch Organisation, the situation of Vietnam’s human rights deterioratessignificantly and remains a major problem for the country Press is strictly controlled andcensored by the government (Human Rights Watch 2014.) Bureaucracy and corruptionremain at a high level despite the government making efforts to apply