Uber and Grab in the Transport Network Company and It Advantages

AMANDA MARGIE BIDES GOLLAYAN

I RATIONALE:

The disposition of the Land Transportation Franchising and Regulatory Board (LTFRB) to include the UBER and GRAB under the Transport Network Company (TNC) which both used internet-based technology or digital platform technology to connect passengers to driver who are using their own vehicles to convey a rider is relatively advantageous to a significant number of commuters, considering the expediency and numerous benefits it provides to the riding public, especially during holidays or rush hours wherein drivers of regular taxis are being tagged as “Isnabero” (picky of passengers). In the traditional milieu, everyone struggled getting a ride in the height of traffic congestion or in cases when there is high demand of transportation in a specific area. Some would chase after a cab who would bid an overpriced fare to ones destination on a “take it or leave it” principle. Others would chase after an overloading jeepney or bus wagging and pushing each other only to get to their destination. Chaotic environment in the jeepney or bus stops has since been an everyday normal scene during rush hours in the thoroughfares.

Owing to GRAB and Uber, in its almost three (3) years of operation in the Philippines, both has proven its worth in the transport service as these mode of transportation facilitates the easy way of obtaining a transport and it caters everybody regardless of age, status, condition, location, and destination provided that they are bona fide registered rider of either or both and of course, a reliable internet connection.

A majority of other people’s testimony about their annoying experience with regular taxis includes: overcharging of fares especially when coming to and from the airports, not giving change, reckless and abusive drivers. Though it may be far from overgeneralizing the industry for there can be few who conform to regulations and standard set by the LTFRB. [i]Suddenly, the tables are turned. You no longer have to deal with taxi drivers. Yes, it costs more, but people are very willing to pay for a service that’s prompt, sure to arrive, and sure to drive your way home. Uber and Grab give the savvy commuter a way to beat a system more flawed than the last Pacquiao fight.

HISTORICAL BACKGROUND:

UBER or GRAB are both [ii]innovative blends of technology, transportation, and low-cost convenience, appeal to the interests of all people with a smartphone. They utilize three major technologies: GPS navigation, smartphones, and social networks, each serving a distinct purpose. GPS navigation systems provide ride efficiency in both distance and time, smartphones allow for convenience and accessibility, and social networks build trust and accountability for both the drivers and the riders. These companies operate similar to a taxi service, however they differentiate in that TNCs use online-enabled platforms to connect riders to drivers using their own personal vehicle. Providing a service called ‘real-time ridesharing,’ the user-friendly apps operate with only one click, locating not only the location of the potential rider, but also the density of drivers nearby and the wait time for the closest driver. They also provide driver information and a method of contact in order to arrange the one-time shared rides. The payment system is simple price is calculated with respect to speed and distance, and customers are billed directly, with receipts sent via email. Convenient and fast, these apps remove stress from both the driver and the rider, providing strong incentives for riders to switch from taxi service to ridesharing.

III TENET

The DOTr 2015-11 of the Department of Transportation provides that: [iii]The cities and municipalities of the Philippines are growing very rapidly. With urbanization and growth come increased demand for mobility. Mobility is a key concern in various Philippine cities and municipalities. Recognizing such need, the DOTC is developing and implementing mass transport systems that can deliver safe, efficient, and reliable transport services. However, given that conventional forms of mass transport, such as urban rail, take time to implement, the Department will recognize new forms of transport services that can help to address the large demand for transport services in expeditious and responsive ways. In addition to recognizing these new forms of transport services, there is also a need to modernize and improve the transport services currently being offered to the Filipino commuting public. Our objective is to encourage innovation across all forms of public land transport in order to increase mobility on major thoroughfares, boost travel times, improve the quality, sustainability and reliability of public transport services, and respond to the needs of the modern commuter.

IV ISSUES:

[iv]Many of us remember the time before Uber and Grab. We know all too well how it feels on the frustration when waiting at a street corner trying to hail a cab, and when one does stop, he won’t open the door. No. He’ll open the window first to ask where one needs to go. If he doesn’t like it, he’ll move on to the person behind, so on and so forth until he finds a trip he likes.

With GRAB and UBER in the streets of metropolis, their patrons claim that they feel much safer and secure on their rides with no hassle obtaining one even in the late nights. At the onset of the ride, one feels the comfort of riding a fresh private car with the smooth drive flow. Equipped with the details of the driver will give one a relief after load of pressures from a nearby appointment or after long hours of work. This mode of transport is best to counter the threats of robbery in collusion with the driver which had transpired in the past involving conventional taxi cabs which have been used as medium in the past by filthy elements to rob or even attempt to rape vulnerable victims among their passengers. Such an occurrence would best illustrate in the recent experience of an OFW who was divested by a taxi driver after fallen asleep inside the taxi of the former: [v] CCTV footage showed a taxi driver stealing from his overseas Filipino worker (OFW) passenger early morning of Saturday, September 9, in Tondo, Manila. The victim, a seaman, was on his way home from a family reunion. The footage shows a white taxi stopping at Road 10 in Tondo at around 2:00 AM. The driver was seen exiting the vehicle and dragging his unconscious passenger to the sidewalk. When the seaman woke up, he noticed that all his belongings, including a brand-new smartphone were missing.

The LTFRB basically [vi] issues franchises as a precondition to operate taxicab. For some reasons, these written permits are usually treated as virtual licenses to operate dirty and smelly public transport vehicles, and to hire drivers who reject passengers, who do not give correct change and are sometimes even outright criminals. [vii]Some may say that there’s that LTFRB’s hotline (including a new Viber hotline) plastered all over the taxis and all PUVs in the country as a means of recourse for commuters, but that’s a pointless refuge for one of dozens on a sidewalk trying to hail for a cab. Interestingly enough, in 2014 before the use of Uber and Grab was widespread, the LTFRB says they got 10,000 complaints via their hotline, e-mail, and Twitter. 70 percent of them were about taxis, and a majority were about drivers refusing to carry passengers. [viii]From that frustration and hopelessness rose Uber and Grab, and it’s easy to see why. You book your own car from the convenience of your smartphone. Being able to hail a ride that’s sure to arrive and that’s sure to take you where you need to go is, simply put, bliss for an urban commuter.

With Uber and Grab, [ix]for a while, life was good. We could Uber and Grab all we needed, and it proved to be very useful. xxx. They were permitted to pick up passengers at airports; no more need to deal with exorbitantly expensive yellow airport taxis. That was the biggest relief for any person who landed at Manila’s airports. Grab even started having booths where you can book rides from the airport on the spot if you don’t have mobile data or even a smartphone.

Only just recently, Uber and GRAB operations have to be suspended for some issues as raised by the LTFRB. With a prelude from 2016 when the [x]LTFRB issued a suspension of new TNVS applications in July 2016, and that meant that no new drivers are allowed to join in. Instead of stopping the acquisition of new TNVS providers by Grab and Uber, they continued accepting drivers. And then came the fine. [xi]The party was good, but with it came what could be abuses of a new system.

[xii]Uber and Grab were each fined and ordered to stop accepting and activating new drivers. The regulator said that while Grab respected the order, Uber continued to ignore it, resulting in the suspension. Uber has said it continued to accept new applications but didn’t process them. As a result in [xiii]allowing the continued operation of Uber Philippines and GRAB under TNC slapped a P5-million fine on each for repeated violations incurred since the government allowed their operation two years ago. [xiv]Grab and Uber are determined to keep their partner drivers, notwithstanding a P5-million fine from regulators.

[xv]In August 14, the LTFRB ordered UBER to stop operations for a month. The company initially obeyed the order and suspended its service the following day. Hours later, it was back online after Uber filed an appeal with the agency but the return was short lived: the latter rejected the appeal that same day. Uber was disappointed nonetheless it complied with the order and temporarily stopped operation. Uber, has gain a reputation for bulldozing through regulations around the world. Uber’s suspension in the Philippines prompted messages of frustration from many people on social media, who said the app was better than other transportation options available in Manila, the country’s sprawling capital.

[xvi]Apparently, tens of thousands of riders were left stranded, causing needless inconvenience, while drivers were unable to access the earning opportunities they rely after its initial suspension. The LTFRB urged Uber to offer financial assistance to its drivers as an act of “good faith.” It blamed “the current predicament” on Uber’s “predatory actions.” Uber ran into trouble in the Philippines for continuing to bring on new drivers after the agency suspended its accreditation process last summer, pending a review of the regulations

[xvii]Among the violations, cited in a marathon hearing by the regulator on July 11, were the absence of proper screening procedures for drivers; transfer of accreditation from one applicant to another; and allowing those without provisional authorities or certificates of public convenience to go online.

[xviii]GRAB admitted that of the 28,000 registered partners, only 4,000 have provisional authorities or certificates of public convenience. Uber, on the hand, has more than 10,000 partners but only has more than 600 drivers with proper documentation. If the memorandum circular governing TNCs were followed, accreditation for the two companies should have been cancelled altogether, LTFRB said. However, the agency also took into consideration the riding public’s need for such mode of transportation.

[xix]There is a violation there. Even if the LTFRB did suspend the TNVS application process, the TNCs shouldn’t have violated the memo that allowed them to operate. By doing so, Uber and Grab effectively authorized colorum, and they used the phrase “public demand” to justify it. Now while so many of us vilify the LTFRB for what they do (and what they turn a blind eye to), they did get it right this time. Much like ignorance, public demand can’t justify violating the rules. That’s like being allowed to do business without the necessary permits, registrations, and certificates. Come to think of it, that’s exactly what it’s like. Are the fines and ultimatums issued to the TNCs are justified? Yes. Absolutely. Dura lex sed lex (The law is harsh, but it is the law)

[xx]The LTFRB formed a technical working group involving GRAB and Uber officials to determine how many franchises should be released to the two companies. They promised that they will be lifting and coming up with a number that is acceptable both to LTFRB and to GRAB and Uber, considering also the traffic condition in Metro Manila. It will be a balance of the riding public’s needs, as well as the number that is believed to be appropriate for TNCs to survive and that will address the need of the riding public.” According to LTFRB further averred that the board is mindful of the fact that the violation of the terms and conditions of the terms of accreditation would actually merit cancellation of the accreditation of the TNCs. The overriding interest of the riding public constrains the board not to impose this very serious imposition of cancellation.

[xxi]With Grab and Uber, we have private companies that accredit vehicles which follow the responsibilities expected from licensed public transporters, even if most of them don’t have LTFRB franchises. The LTFRB has become an outright failure in the performance of its government mandate because its licensing scheme amounts to a useless system in protecting the commuting public. Now come two private companies with new systems that have demonstrated rousing success in performing responsibilities which the LTFRB has completely abdicated. The LTFRB is oblivious of the fact that the success of both Grab and Uber represents a resounding public indictment of its failure as a government regulatory agency.

On the other hand, [xxii]Sen. Grace Poe called on transport franchise holders to improve their services and the Land Transportation Franchising and Regulatory Board (LTFRB) to tighten the noose on abusive public transport drivers who overcharge, refuse riders, or operate “colorum” or unregistered units, among others. She said she would work towards crafting a policy that will govern Uber and Grab, keeping in mind public welfare and the common good. Poe also called on the LTFRB to act by September on pending applications of Uber and Grab units with complete documents and reach a decision on fare hike applications of regular taxis, which have been put on hold for eight years despite inflation and cost of living adjustments.

[xxiii]Had Uber and Grab done their own policing in allowing units with franchises or provisional authority to operate, the LTFRB would not have tightened their grip on TNVS, and the public would not have had a hard time booking their services.

[xxiv]So the LTFRB did get it right, but at the same time they need to get the ball the TNVS registration process rolling. The difference between colorum vehicle (i.e. unmarked van services, buses with duplicated plates) drivers versus the drivers under Grab and Uber is that the former are avoiding paying the proper fees and securing the proper registration while the latter are willfully applying and registering. There’s a massive difference. But there is much more to this than just that.

[xxv]The challenge now for the TNCs is clearing their systems of TNVS drivers who are operating without a CPC or a Provisional Authority (PA) and to not exceed the rules. It’s never a good idea to get on the bad side of a government agency when they’re in the right; once they find some kind of non-compliance, they’ll keep slapping fines until you comply. That’s just the way it works. It’s a bitter pill, but it has to be swallowed, regardless of insistent public demand. Uber and Grab are doing a great job of setting an example of how good, how easy, how safe, and how transparent riding in the Philippines can be. They just have to stay within the rules to continue setting that good example, instead of being made one.

RELATED ISSUES:

Car manufacturing business across the world has been continuously burgeoning alongside with technology as it introduces innovative designs of new cars in different categories, such as: sedan, cross over, multi-purpose vehicles (MPVs), multi-utility vehicles (MUVs), sport utility vehicles (SUVs), etc. [xxvi]It should not come as a surprise, then, that motorized transportation whether through private cars or motorcycles is now more than just a symbol of wealth in emerging economies; it is quickly becoming a necessity to reach jobs and other places of interest. For instance, China’s car ownership rate is 25 cars per 100 people to compare, Italians have 60 cars per 100 people but it added 23 million new cars to the road in 2015 alone. The Philippines, India, and Laos are following China’s car ownership push.

[xxvii]The issue is where to put all these vehicles. Not only do Asian cities now dominate the top rankings of TomTom’s congestion index, these hypercongested places are also seeing their numbers get worse. The economic cost associated with lost productivity and time is also enormous, equalling two to five per cent of aggregate GDP. Meanwhile, local commute times are getting even longer. While average commutes in London and Tokyo are below 40 minutes, Beijing’s and Shanghai’s already exceed 50 minutes. Anyone who has travelled to megacities like Bangkok and Jakarta, Indonesia, has a vivid picture of streets bursting at the seams. Finally, parking is a growing concern in Asian cities, as storing all those vehicles threatens to consume land that is in increasingly short supply.

Beyond the intention to solve the scarcity of parking spaces that would cater every car owner, there arose the trend of ride-sharing or carpooling. Ride sharing or carpooling has embark the principle of sharing a ride by a private car owner to specific number of people within the proximity of his home going towards the same destination as that of the latter. [xxviii]The idea is that as long as someone has ownership, then everyone has access. This is the beginnings of the ‘sharing economy’ as we know it today. It is a peer-to-peer market that utilizes the internet to connect people directly with others to receive a service or rent an item. xxx.^[3] Beginning with the internet, the sharing economy, quickly made its way to birth ride sharing apps like Uber and Lyft. Through apps, social media, and websites, the sharing economy becomes a digital market place. Commonly known peer-to-peer business eBay allows anyone to become a retailer. Sites like Alibaba only take it a step further, connecting suppliers with innovators. ^[4] It benefits ride sharing services to not just see their business succeed, but all peer-to-peer services succeed. In due part, because all peer-to-peer firms face entrenched interests. The peer-to-peer services can also promote their social aspect. Riding in the front seat of an UberX car encourages conversation rather easily compared to the traditional cab service. Services like these play on the social nature of humans.^[5]

Uber and Grab facilities addressed not only the high demand of convenient public transport but it somehow tackle the issue on narrowing parking spaces and street congestion in the urban areas especially in the Metro Manila. Should the government would perfectly iron out standards for the TNC to adhere and become successful in the long run, it could be made possible as well for the government to regulate car ownership that is severely causing the thoroughfares seemingly a huge parking lot. Of course, it can be realized by formulating methods that would discourage car ownership, instead, it will advocate promoting patronage of the TNC as a reliable service provider to the majority of commuting public.

DISCUSSION:

The restrictions implemented against the transport network vehicle system (TNVS) produced a downturn effect to its riding customers. The ease and convenience in obtaining a ride prior the impediment had swop over to an arduous task of booking and waiting for an available driver especially during rush hours where demand is high for riders to get into their own destinations.

Notably, there has been few TNC’s which continued to operate after the setback. Their initiative to meet the demand of the riders by introducing car pool into their system was of advantage. Evidently, however, the scheme is still not sufficient to convey all the riders.

TNC has been an effective partner of the riding public from all walks of life for their everyday conveyance for practical reasons. For others, although they have their own vehicles, they find it more convenient to ride TNC than to pay a toll or parking. Some others prefer to ride than to drive in the middle of gruelling street congestions. Unaware of the effect of such personal disposition, it helps lessen the number of vehicle in the streets.

CONCLUSION:

The transport network company is significant in the urban transport industry within the metropolis as it facilitates the hassle free mobility of the citizens, diminish traffic congestion, reduction of vehicle ownership as it offers more convenience while promoting road safety with the manifests driving efficiency of drivers. Therefore, the LTFRB’s decision to grant Uber and GRAB to operate under the Transport Network Company is ideal. Furthermore, the latter should uphold the wide scale operation of the TNC which would mean to allow additional number of private vehicles to enter in TNVS so as to limit personal use and colorum vehicles running in the thoroughfares which are the major cause of unwanted street congestions.

[i][i] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[ii] (http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1648&context=scripps_theses)

[iii] (http://dotr.gov.ph/images/issuances/DO/2015/DO2015-11.pdf)

[iv] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[v] (http://filipinotimes.net/news/2017/09/12/ofw-robbed-taxi-driver-manila/)

[vi] (http://opinion.inquirer.net/105798/grab-uber-render-ltfrb-irrelevant)

[vii] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[viii] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[ix] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[x] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[xi] (https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html)

[xii] ((http://www.interaksyon.com/govt-allows-uber-grab-to-continue-but-fines-each-p5m-for violations/), August 15, 2017)