Transit Expediency: Carpool services vis-à-vis LTFRB Policy

Barbero, Apple B                                                                                           Legal Writing 5:00-7:00

 

Technological innovation is convenience. This may be deemed true to an extent as it offers alternatives which always come with a price tag.

The aggravating public transportation problem in the metro pressed the government through the Department of Transportation (DoTr) and Land Transportation Franchising and Regulatory Board (LTFRB) in devising mechanisms to address and alleviate the same transportation issues (i.e. traffic, metro light rail system, dilapidated roads etc.) plaguing the riding public on a daily basis. It offers an alternative mode of transportation through carpool services to prevent too much accumulation of vehicles in main roads.

These mechanisms paved the way for the introduction of Uber and Grab carpool services as an alternative pubic mode of transportation which proved to be of great, if not equal demand from a percentage of the riding public as evidenced by necessity and convenience.

These carpool services are authorized under the Transportation Network Vehicle Service (TNVS) as a new classification of public transport conveyances. They operate through the issued Certificate of Public Convenience[i] by the LTFRB pursuant to Department of Transportation and Communications Department Order No. 2015-15 amending the Department Circular No. 97-1097[ii]

TNVS operates through an Online-enabled Transportation Service (OETS), an online application or platform technology that connects drivers with passengers who request a ride and provides services by facilitating the available vehicle to pick up the passengers. This system was spearheaded by Transportation Network Companies (TNCs).[iii] The concept of TNCs was borrowed from the California Public Utilities Commission.[iv]

According to the Memorandum Circular, what constitutes TNCs are “corporation, partnership, or sole proprietor, that provides pre-arranged services for compensation using an internet-based technology application or digital platform technology to facilitate transportation of passengers by the drivers with the use of their personal vehicles.”[v] As such, TNVS provides an avenue for the conversion of private vehicles to public transport conveyances duly accredited by the TNCs to which the LTFRB lodged the capacity to authorize such vehicles to legally provide transportation services.

However, conflict arises when several non-government transport groups specifically operators of taxi/cabs seek for the recall of Uber and Grab carpool services as it was disputed by them that most of those operate on a colorum basis absent the necessary accreditation from the LTFRB as provided under Memorandum Circular No. 2015-15.[vi] The point of contention in the referred circular is that whether the LTFRB can intervene in TNCs transportation services considering the set limitations that comes with its authority.

Binding of Entities

LTFRB allows TNCs to subsequently authorize vehicles to operate through accreditation. LTFRB’s authority is binding not only to TNCs alone but to whoever is involved and subjected to transportation services, at most the carrier and passenger are bound by the Board. Since the transportation services offered by TNCs are only accessible to passengers who can avail them. Thus, it is not the public at large. It is only those who offer and avails of the service, the accrediting drivers and private individual passengers respectively, are subjected to the rules laid out in the circular. Now, what is merely paid for by the drivers is only the authority under which they can legitimately operate; anything outside (i.e. occurrence of accidents due to negligence) the scope of such is lodged to the drivers themselves. Hence, TNCs by this notion is exempt from whatever liability the drivers may produce as provided for in the liability clause of the referred circular. The authority emanates from them but they cannot be sued for recovery of damages. Ipso facto, LTFRB cannot legitimately compel TNCs to pay for damages incurred by the carriers to its passengers as they are not bound under its authority.

Another point of argument ensues from the aforesaid issue, that is whether TNCs through the TNVS be deemed as “common” carrier, otherwise they are not bound by the regulation of LTFRB.

Article 1732 of the New Civil Code (NCC) provides that, “common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.”[vii] Further, a common carrier is required to observe extraordinary diligence and is presumed to be at fault or to have acted negligently in case of loss or the effects of passengers, or the death or injuries to passengers.[viii]

As held by the Supreme Court in Bascos v. Court of Appeals[ix],

“Art. 1732 of NCC avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ordinary activity (sideline). It also avoids a distinction between a person or enterprise offering transportation service on a regular basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does the law distinguish between a carrier offering its services to the general public that is the general community or population and one who offers services or solicits business only from a narrow segment of the general population.”

In terms of passengers, those who can avail of Uber and Grab are those who have an access to an application via internet that connects drivers with passengers who request a ride and provides services by facilitating the available vehicle to pick up the passengers. In a pre-arranged set-up transport service, a TNC-accredited vehicle may transact business with one or more passengers simultaneously as they provide for carpooling. As such, a person who has an access to such application may share the service with another. However, those passengers with invited guests and accommodation passengers[x], by law do not consider the latter as a passenger. Thus, whatever may ensue from the transaction do not extend to them.

As in the case of Uber and Grab were most carriers are engaged only on a part time basis for additional compensation, do not make a difference so long as the elements of common carrier is satisfied that they are engaged in business of transporting or carrying goods and passengers.[xi]

Ipso facto, Uber and Grab are common carriers as they are deemed qualified within the ambit of Art. 1732 solely. However, it does not follow that even if they are deemed common carriers in accord with NCC, still its characteristic is sui generis in terms of its utilization of technology.

Liability Issues

In the case of TNCs situated in California where there was no statute or enabling law that regulates those who engaged in such transport services. The entities providing for such services are free to contract business in a manner they may deemed. Although there is a memorandum circular which provides the guidelines for TNCs in the Philippines to go about its business, there is no statute that governs its use of internet-based platform technology.

Contrariwise, absent an enabling law in the Philippines which authorizes and regulates those carpool in their use of internet-based platform technology in transport services renders them as not liable in terms of possible damages directly incurred by the accrediting drivers in the course of the service.

Considering these facts, LTFRB has no jurisdiction over TNVS as to the services and TNCs as to the entity providing for the services which the Board cannot regulate absent a valid and existing law that shall govern the utilization of internet-based technology as to the authority, liability and penalties that may result from whatever possible damages directly incurred by the accrediting drivers in the course of its transaction.

The referred circular can be construed as generally inconsistent with the provision for the protection of the passengers in such negligence cases in accord with Articles 1733, 1755-1760 of the New Civil Code which clearly stipulates for the liability and Art. 2206 as for the damages of the Common carriers in the act of proving for transport services to passengers. Therefore, the liability clause of Memorandum Circular is patently illegal and inconsistent with the established provisions of NCC. The LTFRB cannot compel TNCs that operate Uber and Grab to be liable for such in the absence of an existing law.

Still the passengers may not be left without due recourse. LTFRB may authorize TNVS and TNCs to legitimately operate through the OETS where there exists a legislation of a statute or an executive order, which shall be necessary to provide for its regulation and conduct of business through technology-based platform; ascertaining the scope and its limitations in terms of transaction information, fare rates, liability and penalties inter alia. This initiative may come from the Transportation Committee of both Houses of Congress by virtue of its police power to closely regulate them.

 

Platform Technology

            The enactment of a law that shall regulate the utilization of internet-based platform technology of TNVS in transacting its business is indispensable. Through the use of technology, authorities can secure and monitor information per transaction of carpool services. This can be an effective means of regulation provided implemented accordingly. This law shall govern as to the information which can detriment the privacy of the individuals involved, its scope and limitations as to transacting businesses; rights of those who will engage in such, and liabilities and corresponding penalties in case of violation of which.

            Through the police power of Congress, the state can closely regulate the operations of carpool services. It can legitimately encroach into the privacy of certain information from the transacting individual/s in exchange of tracking business operations and protecting their rights where negligence may ensue.

            However, governing a system utilized by a network may need an appropriation for its maintenance and operation. This may need wide-ranging deliberations in Congress to fully grasp the limits and sanctions that may impose upon the carpool services.

 

Pre-Accreditation Committee

The Pre-Accreditation Clause of Memorandum Circular 2015-015 provides for the Pre-Accreditation Committee who shall evaluate all applications filed and recommend to the LTFRB for approval or disapproval of the same. Any interested applicant may file an application, together with all the required documents, before the Committee. Any applicant who/that fails to submit or comply with any of the requirements prescribed without any justifiable reason shall be disapproved outright without any need of further evaluation.

            The contention with this is the authority given to TNCs who can pre-select who they may deem to fit to render transportation service as TNVS. Rules and regulations for TNCs accreditation are laid out by LTFRB in MC No. 2015-015.[xii] However, upon creation of the pre-accreditation committee, LTFRB does not clearly stipulate the guidelines so long as the entities comply with the prescribed requirements. TNCs are clothed with authority through the committee as to the manner of pre-accrediting which may only approve or not by the LTFRB. Thus, it can decide on the applications not based on merits but on prejudices because a clear standard for selection has not been set which can be a source of or prone to corruption. They should not render favour to certain transportation providers on the basis of huge bucks of registration/license fees. The pre-committee board should not be co-opted in the selection of transport service providers but guarantee that their qualifications are of merits.

An irregularity may arise on the creation of the pre-accreditation committee in the absence of patent bylaws. What the LTFRB intends to be an efficient conduct of accreditation may turn the Board into a rubber stamp upon mere approval or disapproval which runs counter from its power to regulate.

 

Socio-economic Impact

The memorandum circular rendering the transaction of business operations of TNVS and TNCs prompted transport groups and/or organizations especially cab/taxi operators to call out for equal treatment from LTFRB. They initiated that LTFRB should stringently implement guidelines in screening TNVS in terms of policy on maintenance, drivers and operators.

            The entry of Uber and Grab into the transportation scene created a further divide in the percentage market share of PUVs. TNCs are left with the discretion to fix its own fare rates per destination covered which is relatively higher than the range set by the LTFRB for public rides. Driven by disparity, the transport groups and/or operators calls for a fixed rate for all PUVs so as to level the initial market share at the least. The Board should ensure that the level of playing field in the market share of TNVS at par with those of other Public Utility Vehicles (PUVs).

            As not to detriment individual and/or group engaged in carpool services such as Uber and Grab, the possible solution for this is an enactment of the law authorizing carpool utilizing internet-based platform and through the comprehensive amendment of MC No. 2015-015 for the inclusion of fare rate system based on the scheme prescribed by the LTFRB. The Board may implement appropriate measures considering franchise, operator fees and compensation of drivers. In effect, the fare rate system would be at par with those of other PUVs.

            In sum, the dispute in the sui generis characteristic of Uber and Grab carpool services has to be defined and established by law. That law shall clearly define the extent which it can operate to effectively imposed sanctions upon those who would be held liable in cases where negligence can arise. Considering the fact that existing laws do not legally define and recognize such TNVS through the TNCs, as well as the circumstances surrounding it, they cannot answer to liabilities as far as they are not bound by LTFRB’s jurisdiction.

[i] Certificate of Public Convenience Defined. BatasNatin.com Accessed from https://www.batasnatin.com/law-library/mercantile-law/transportation-laws/2218-certificate-of-public-convenience-cpc.html, 16 October 2017.

[ii] Land Transportation Franchising Regulatory Board Memorandum Circular No. 2015-015, 2015 May 28

[iii] Department of Transportation and Communications Department Order No. 2015-11, 2015 May 08

[iv] Ibid.

[v] Land Transportation Franchising Regulatory Board Memorandum Circular No. 2015-017, 2015 May 28

[vi] Department of Transportation and Communications Department Order No. 2015-11, 2015 May 08

[vii] Land Transportation Franchising Regulatory Board Memorandum Circular No. 2015-015, 2015 May 28

[viii] Pereňa v. Zarate, 679 SCRA 208, August 29, 2012; and Articles 1733, 1755-1760

[ix] Bascos v. Court of Appeals, GR No. 101089, April 7, 1993.

[x] Lara vs. Valencia, G.R. No. L-9907, June 30, 1958

[xi] Ibid.

[xii] Land Transportation Franchising Regulatory Board Memorandum Circular No. 2015-015, 2015 May 28

Government Regulating and Embracing the Innovation of Public Land Transportation Services

Deligero, Jchelle L.

 

 

Transportation is one of the most sought necessities in today’s generation, be it for personal, education or business. Through services of different types of vehicle, we obtain the necessity of transportation by communicating with the service provider and paying them accordingly with the distance, place, type of vehicle (available number of seats), economic status and other factors considered. Transportation has been into various modifications in terms of settlements either with public or private vehicles particularly on the method to avail the service, cost parameters, modes of payment and the like. With these modifications, basis of fares have also simultaneously changed.

In the same way with communication, transportation has been also associated and upgraded by technology. With this technology’s trend, we may now acquire transportation services through calls or internet aside from personally obtaining it. Physical appearance in acquiring tickets for transportation is now being an option as long as the necessary documents are presented upon travel. With the diversification and innovation of technology and transportation, opportunities were opened for businesses such as Uber and Grab. Both companies owned an application and/or software solely for transportation services which, in effect, is an aid for passengers and transportation service provider to communicate. In a sense that it outshines the old fashion of transportation. Hence, what the public embraces the government also embraces.

In 2013, Grab was first launched as GrabTaxi in the Philippines and was followed by Uber in 2014. As a medium of transportation services, these companies are being governed and considered by Land Transportation Franchising and Regulatory Board (“LTFRB”) as a Transportation Network Company (“TNC”) and which under their authority. LTRFB defined Transportation Network Company (TNC) as an organization whether a corporation, partnership, or sole proprietor, that provides pre-arranged transportation services for compensation using an internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles. This definition is contained within the memorandum circular issued by LTFRB and was correlated with Department of Transportation and Communications (“DOTC”) amendment with the rules in relation to the standard classifications of public transport, counting the Transportation Network Vehicle Service (“TNVS”).

From the aforementioned definition, TNC is a provider of networking services separate from the vehicles being used for transportation services while TNVS, on the other hand, would be the transportation service provider. Applications owned by TNCs not only communicate drivers with customers but also determines the fare in real-time. Akin with taxis, fares are unfixed or may still vary with TNCs predetermination. The primary tool used by both taxis and TNCs in the predetermination of fare would be the current traffic status, except that the former having a flat-rate of forty pesos (P40.00) in every ride. Unlike with other public transportation vehicles such as jeepneys and buses, in relation to the number of passengers, TNVS is limited up to seven (7) passengers only. TNVS is also a no-fixed route therefore, technically speaking, may be available to any places. However, there are only limited places where the platform application is pertinent to use. There are also instances wherein a certain place is available to use the platform but no TNVS is there to avail. Hence, the usage of the application may also vary on the availability of the TNVS to commit and provide transportation services.

TNVS may or may not have an operator separate from its driver, they could be the same person or both separate. Nonetheless, taxis are also allowed to use TNCs application and/or software and technically include them in the classification as TNVS. Thus, shows the overlapping in the classification of public transportation vehicles. Any kind of similar vehicles may also be allowed to be accredited by TNC as long as it is registered properly and in accordance with the requirements permissible by the government.

As above-mentioned, TNC provides pre-arranged transportation services for compensation. The pre-arrangement of transportation services is very much similar with travel agencies. They are similar in a way that travel agencies may use different digital platforms to accomplish their businesses. It was defined that a travel agency is a business that operates as the intermediary between the travel industry and the traveler. Conversely, comparisons between TNC and travel agencies may be identified as follows: (1) for the former, the means of the pre-arrangement, through self-service, is through internet-based technology application and the latter through a travel agent with a confirmation from the client by telephone, electronic mail or personal appearance; (2) former’s scope only includes land transportation services and latter’s scope widely includes other transportation services such as air and water transportations; (3) relationship between the provider of pre-arrangement services and the transportation service provider or the motor vehicles; (4) government agency that issues the accreditation to operate; (5) relationship with clients or customers may be built prospectively for the travel agencies while the probability for TNC is imprecise to have that bond with customers; and (6) TNCs’ route vary or not necessarily be fixed. Nevertheless, the best similarity would be their predetermination of rates based on the same factors such as place, time or season, and economic status.

The relationship between TNC and TNVS is more likely on a contractual basis, which TNVS’ drivers and/or operators are registered and accredited by TNC with fees. It can also be comparable with franchising businesses. Wherein, a franchisor grants right to the franchisee for the latter to use and sell the former’s services or goods. In the case of TNC and TNVS, the former grants the right to use the application and/or software for the latter to operate and provide transportation services. The material difference then would be the accreditation of TNVS to TNC, which for franchisee-franchisor relationship need not be required to be accredited. Additionally, there are other agreements in franchising particularly a supplementary fee is to be paid to the franchisor upon earning a target income. On the contrary, the compensation from the public transportation services provided are all earned by the TNVS operators or drivers and no percentage of it is shared and paid to TNC. As well as the business operations of the TNVS are separate from the TNC.

Along with travel agencies, proceeds from the operation and the business operations are not being handled by the travel agents as the intermediary for providing the transportation services. The most known franchise in transportation service industry would be UV express, where LTFRB grants the public utility vehicle operators to operate transportation services with specific routes. As mentioned, the indirect grant of operating the transportation services might be one of the basis of LTFRB to include TNC under their authority. It is however imprecise as to the grant of accreditation to TNC by LTFRB, if it would make TNC as a mere operator of TNVS. This would generally mislead the nature of their industry. The privileges granted by TNC to TNVS do not have a direct relation with their nature as they merely grant the use of their application and/or software and neither operate the nature of providing transportation services. Nonetheless, TNC’s platform application operates the pre-determination of fare which defines the compensation of the transportation services of TNVS.

As stated in Grab’s Terms of Service, the company is a technology company that does not provide transportation services and the company is not a transportation provider. It was expressly disclosed the nature of their industry as a technology company. However, through the pre-arrangements and predetermination of rates by the digital platform, they are indirectly providing transportation services. On the basis that without the given privilege to use of their digital platform, there would have been no communication and transportation services that will occur. TNC, as included in the Intellectual Property Code which grants a revocable, non-exclusive, non-transferable, non-assignable, personal, limited license to use the application and/or software correlates with technology transfer arrangements.

By definition, the term “technology transfer arrangements” refers to contracts or agreements involving the transfer of systematic knowledge for the manufacture of a product, the application of a process, or rendering of a service including management contracts; and the transfer, assignment or licensing of all forms of intellectual property rights, including licensing of computer software except computer software developed for mass market. Conversely, technology transfer agreements excludes computer software that are developed for mass market. Thus, makes TNCs’ digital platform distinct with other internet-based technology as they are designed and developed for the public transportation service and convenience of a mass market.

There are some software companies that grant the use of their copyright software even if the supposed purpose of the license different with their nature of industry. These software companies granting license, through contract and licensing agreements, also include other support services such as but not limited to maintenance and assistance with the application and/or software. Same procedures are also being observed by TNC in relation to the grant of use of their application through agreements. However, the latter do not have additional services for those that were granted to use their application, such as mentioned, as it is only a digital platform used as an intermediary between the passenger and drivers.

A digital platform brings together process, people and technology into a value network that provides consumers access to an extensive selection of products and services within and across multiple markets. Same with other digital platforms such as Facebook, TNC agreed with drivers to benefit the use of their software for providing transportation services to public. TNC’s application and/or software unique characteristic is its solely providing technology for transportation services while other digital platforms may provide or supply different product or services.

TNC as defined through the use of a digital platform technology to connect passengers with drivers, shall it render to be a factor for LTFRB to include them under their authority? It was stated and emphasized that TNCs, in their terms of agreement, merely are a technology company. Should this definition be more binding as it reflects their very core of business than just by defining them as an organization that provides pre-arranged transportation services? In relation to the definition by LTFRB, it reflects that TNC are more of an agent which uses an internet-based technology or a digital platform. On the other hand, if it to be deemed emphasize TNC as a technology company designed for public transportation convenience, hence will render TNC be subject to the authority of LTFRB. To reiterate and discuss further, the difference with the two definitions mentioned is that on the former, it was more stressed that TNC’s primary purpose of its business is to pre-arranged transportation services for compensation using a digital platform. While for the latter, it realistically labeled TNC granting the use of their application and/or software in a digital platform connecting customers with TNVS operators and/or drivers. It is nonetheless that the definition contradicting from the very nature of TNC’s business. TNC does not somehow uses the digital platform itself and not directly pre-arranges the transportation service. It is moreover used by TNVS drivers and customers communicating and settling terms that are automatically computed through the application on the basis of the distance of the travel, location of the destination, current traffic status and other related factors.

Looking into one of LTFRB’s function which is to formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standard of measurements and/or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations.

To reiterate, it mentioned the operators of any public land transportation service be required to equip or install such techniques that would promote convenience to persons. It may then be considered that TNC’s application be an equipment promoting comfort and convenience to passengers. Thus, shows that the application itself is only an equipment or tool for providing the transportation service. TNVS, through TNC, produces or accomplishes convenience to the public as passengers may able to ride and arrive at designated route requested. The public also insisting the safety with TNVS is more appropriate than of taxis. As a mere fact that TNC resulted to public land transportation convenience, LTFRB covered TNC under their authority.

To add, LTFRB also has the power to issue, amend, revise, suspend, or cancel Certificates of Public Convenience (“CPC”) or permits authorizing the operation of public Land Transportation services provided by motor vehicles, and to prescribe the appropriate terms and conditions. In regard to this power inherited to LTRFB, they require. However, the scope of the authority covers those who operate a public land transportation service, which in this case refers to TNVS. Incomprehensibly, TNVS required to be accredited first by TNC, which required to obtain a certificate of accreditation from LTFRB, in order for the CPC be issued. It has also stated part of TNC’s liability to exercise due diligence in accrediting drivers, thus conflict with the nature of TNC. It is however redirecting the nature of TNCs from mere providing of the application as a platform to an accreditation company involving transportation services.

Accordingly, public land transportation is a shared passenger-transport service available for use by the general public. Thus, LTFRB covering TNVS under this definition. The distinction of the TNVS from the public land transportation would be the involvement of a private pre-arrangement through TNC. Would this involvement by TNC generally make them be under the authority of LTFRB? Another issue would then be if TNC be similarly linked with operators of these public land transportations. TNCs do not have the authority to operate TNVS but accredits the latter to operate. Operators, on the other hand, directly have the access and handles the public land transportation service providers.

The accreditation required by LTFRB to be obtained by operators generally allowed them to operate public transportation vehicles such as Buses. In regards to the accreditation of TNC, similarly required to be obtained, it does not merely allow them to operate TNVS in general. Exactly so, TNC grants the use of the digital platform to TNVS for them to operate and provide transportation services to public. If accreditation required by the LTFRB is not obtained or relatively expired and no renewal has been sought by TNCs, they are mandatorily estopped from operating their business and prohibiting them to grant use of the digital platform to TNVS operators or drivers to provide transportation services. More likely it shows that the prohibition of TNC to operate lacks due process on estopping them from operating their business as at the expiration of the accreditation or of not obtaining it would render absolute. Still, its purpose similarly for the public’s transportation convenience.

Though the government has promulgated these new rules and regulations and have amended prevailing standards through issuance of the department orders and memorandum circulars in relation to TNC’s definition such as, but not limited to, Uber and Grab companies under the authority of LTFRB still raises questions and confusions. It confuses the thought of this kind of industry as it brought new innovations with our country.

It turned out that LTFRB’s action based on the current provisions that they ought to perform such other functions and duties as may be provided by law, as may be necessary, or proper or incidental to the purposes and objectives of its creation. It is even commendable that DOTC and LTFRB take such actions to accommodate this new kind of transportation industry. However, LTFRB’s functions do not completely or directly corresponds with the TNC’s definition. Hence, it is recommendable either to establish a separate government agency or to make an additional functions of LTFRB to properly govern this new land transportation service industry.

If to establish a new government agency, then LTFRB may properly exercise one of their functions which is to coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services. The definition for TNC as defined in the memorandum circular promulgated by LTFRB may be deemed appropriate to establish a new government agency in relations to businesses using digital platforms. As for the reason that the definition of TNC does not coherently direct to the main functions exercised by the LTFRB.

On the other hand, it would also be noteworthy to constitute an additional function of LTFRB in relation to businesses uses medium, not just TNC, which are essential and primary instrument of providing public transportation services. This is to further clarify that without these digital platforms granted by TNC to TNVS operators and/or drivers, the public land transportation service may not be provided or may be prohibited to operate if will not follow the regulations previously regulated. Also with the same reason that the digital platforms owned by TNCs are purposely for the public transportation convenience. Simultaneously, TNCs definition need be revised and clarify their functionality to the public transportation services. The revision would also need to emphasize the significance of TNCs. This is also to properly identify the scope and whose authority are to be sought for TNCs. Proper delegations of functions must always be observed by our government to appropriately exercise powers granted.

 

References

Accenture. n.d.

Castillo, Paul Cornelius. Road Rules: Is the law apt for an app? – Feature Stories. August 19, 2015. http://www.autoindustriya.com/features/road-rules-is-the-law-apt-for-an-app.html (accessed September 10, 2017).

Executive Order No. 202. Creating the Land Transportation Franchising and Regulatory Board. June 19, 1987.

Goeldner, Charles R, and J.R. Brent Ritchie. Tourism: Principles, Practices, Philosophies. Wiley, 2003.

Memorandum Circular 2015-015. May 28, 2015.

Grab PH. Terms of Use for Philippines GrabTaxi Passengers. August 1, 2017. https://www.grab.com/ph/terms/ (accessed September 10, 2017).

Sarmiento, Jorge Franco S. Some Things About the Bills on Transport Network Vehicle Services. August 28, 2017. http://www.sarmientolawfirm.com/435-2/ (accessed September 10, 2017).

Vehicles, Virginia Department of Motor. TNC Frequently Asked Questions. n.d. https://www.dmv.virginia.gov/commercial/tnc/faqs.asp.

 

Is LTFRB correct in considering/including/regulating Uber and Grab in the definition of TNC according to LTFRB Memorandum 2015-015 in providing software platform for predetermined fares in transportation services?

Richie O. Coo

 

 

Introduction

 

Technology has been constantly advancing by leaps and bounds through time immemorial.As technology advanced through time immemorial, transportation followed. From the advent of mounting horses, through the advent of wheels and carts, and through the advent of mechanical vehicles, transportation has contributed to the advancement of the socio-economic state of a country, and the elevation of the welfare of the public. Transportation has helped and always been helping in the overall development of a country and its citizens who live and sojourn in its territory. Through transporting goods and people, employing workers which can count to millions, generating revenues, and consuming materials and services produced by other sectors of the economy, it is undeniably an important factor which contributes to the development of a country. Thus, transportation infrastructures in the Philippines, like roads, railways, expressways, and skyways, are of importance in achieving a high economic growth that this country so much desires.

Transportation infrastructures gives convenience to all vehicles as it gives quicker access to different destinations. Expressways are created to give quicker access to cities that are several kilometers away from one another. In 2014, the Average Daily Vehicle Entries (ADVE) in North Luzon Expressway (NLEX) was 185,267 vehicle entries[i]. Motorists and Commuters also benefitted from the Skyway System which was a project of the administration of the President Fidel V. Ramos. Stage 1 of the Skyway System consists of the 9.53 km elevated expressway from Buendia to Bicutan and the 13.5 km at grade level from Magallanes to Alabang. When the Stage 1 of the Skyway System opened in 1999, an average of 160,000 vehicles passed thorough it daily. It has afforded hundreds of thousand motorists and commuters an enormous cutback of 2 hours of travel time from the heavily trafficked roads of Makati Central Business District[ii]. Though transportation infrastructures aid the traffic to lighten in roads and streets, we have the public transportation system, like buses, jeepneys, and railway transits, which enables large-scale transportation of commuters via routes prescribed and regulated by the Land Transportation Franchising and Regulatory Board.

Modes of transportation services

These public transportation vehicles have well-coordinated interlocked networks of land routes. Buses have routes from Novaliches to Alabang and vice versa, which passes through EDSA where many different buses with different routes connect. Jeepneys too have the same functions as buses have. They only are different from the buses due to the facts that they can only contain fewer passengers, have shorter land routes, and can navigate in narrower streets of cities. Millions of commuters use the buses and jeepeneys as they are cheaper as oppose to other modes of commuting. Railway transits like Light Rail Transit (LRT) 1, 2, and Metro Rail Transit (MRT) 1 are faster yet slightly more expensive than buses. They have a long route which are all interconnected and, together with their railway transit network, can pass though all around the Metro Manila. In 2013, there has been estimated average passenger traffic of 14 million passengers[iii]. Public transportation system has indeed the capability for large-scale transportation of commuters but it does not have the convenience, comfort, privacy, security and leisure that the private transportation system can offer.

Private transportation system, like taxis and Transportation Network Vehicles (TNV), which we will further discuss later in this paper, offers convenience, comfort, privacy, security and leisure to commuters who can afford their fare rates. Taxis, which operate within Metro Manila, can be hailed in the streets or can be called upon though their respective companies. The TNV, however, cannot be hailed but can only be called upon using its internet-based software application.

Even with all the different modes of transportation which enable commuters to arrive at their different respective destinations, heavy traffics persist in the streets and roads of Metro Manila.Even with all the grand transportation infrastructures built by our predecessors in the past decades, heavy traffics still have not shown signs of letting up. Heavy traffic has been persistently haunting the lives of commuters and motorists alike in Metro Manila, making commuting a gruesome and tedious daily activity. Gridlocks plaguing Metro Manila will not only affect the commuters but also the economy of the Philippines as well.

Economic Impact of Transportation in the Philippines

Traffic congestions have also an adverse effect on the economy of the Philippines. In 2014, the Japan International Cooperation Agency (JICA), in junction with the National Economic Development Authority (NEDA), cited in a study that the traffic congestion all over Metro Manila is costing the Philippines at around 2.4 billion pesos every day. In 2015, NEDA Director General Arsenio Balisacan estimated that the Philippines is losing 3 billion pesos a day due to traffic congestion, amounting to 0.8 percent of the gross domestic product. In 2030, if the daily gridlock in the streets and roads of Metro Manila will persist and is not solved or lightened, it is predicted that it will cost the Philippines at around 6 billion pesos[iv].

Multiple programs or solutions were andare constantly presented to the commuting public by different government agencies, such as the Metropolitan Manila Development Authority (MMDA), to fix an irritatingly unsolvable problem to the commuting public and to the economic state of this country.Programs such as the Unified Vehicular Volume Reduction Program, abbreviated as UVVRP, also commonly called as the Number Coding or Color Coding, aims to reduce traffic congestion in Metro Manila by restricting vehicles of certain types from using major public roads based on the final digit of their vehicle’s license plate, during peak hours[v].Future projects and programs are also on the way such as the adaptation of Metro Manila Bus Rapid Transit (BRT) system which will alleviate the traffic congestion around Metro Manila by establishing dedicated bus lane and stations in hopes that it will regulate traffic flow[vi], highways connecting directly the two major expressways of Luzon which are the North Luzon Expressway (NLEX) and South Luzon Expressway (SLEX)[vii], and the extension of LRT 1 to Cavite[viii] and LRT 2 to Antipolo[ix]. Projects like these will still require time and resources for these to be operational. Thus, the commuters hold on to a less hassle approach to traffic which is what we call ride-sharing or carpooling.

Ride-sharing or carpooling is a way of sharing a single automobile with friends. They would just share the cost of the ride by pooling cash for fuel expenses. It somewhat alleviates the traffic as it lessens the automobiles traversing the streets and roads of Metro Manila. It has been a traditional way of friends with automobiles on commuting as a less expensive approach while having the comfort, privacy, security and leisure it provides. Thanks to the innovation of Uber and Grab, two prominent companies in this kind of transportation services, it enabled not just friends but also strangers to carpool using their innovative internet-based application. Though Uber and Grab trips are only represented a “minority” in the total number of trips in Metro Manila, amounting to 2% of the 21.5 million trips per day recorded in 2015, it somewhat quelled the annoyance of middle-class and upper-class citizens against the incompetency of the government to solve traffic congestion[x].

TNCs: Uber and Grab

Uber began its business venture in the taxi industry in San Francisco, California as early as 2009[xi], while Grab, then called MyTeksi, started in Singapore in 2012[xii]. Both companies answered the same persisting modern-day problem – hailing a cab/taxi. Hailing a cab required commuters to wait along the side of the streets, and during rainy seasons, commuters will even have to look for one while soaking wet and freezing. Taxi drivers will even have the gall to ask a higher price opposed to the regular fare rate. It made hailing a cab an uncertain task to accomplish. There is also the uncertainty of the security of the passengers, just like how a taxi driver, armed with a samurai sword or “katana”, attacked a passenger[xiii]. Hailing a cab became a tedious thing to do for most commuters who use taxi services.

Then came along Uber and Grab. These companies are identified as Transportation Network Companies (TNCs). According to the LTFRB Memorandum Circular No. 2015-015, A TNC shall mean as an “organization whether a corporation, partnership, or sole proprietor, that provides pre-arranged transportation services for compensation using an internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles[xiv].” TNCs can hail TNVs for commuters with just a click of a button. Through the advent of internet-based software application, it hailed TNVs that are near your current location. The TNV can be called upon using its “Online-Enabled Transportation Service (OETS)” technology which uses an internet-based digital technology application by connecting available registered vehicles with registered customers who request rides[xv]. It was a new hassle-free approach on getting a ride.

The original concept and principle of TNCs, which is carpooling, have beneficial effects on the traffic in Metro Manila. It reduced vehicle ownership, reduced vehicle travel and other impacts, like lower emission, increased transit ridership, cost savings, and greater mobility[xvi]. TNCs, as well, have an edge in safety through effective information dissemination, convenience through technological advancements in booking and GPS, and comfort through newer cars and performance conscious drivers[xvii].

Through Uber’s and Grab’s innovative technology, commuters would need not have to calculate and predict how much the fare will cost because the fares, which is calculated depending on the distance of the travel, are all fixed in rates. This is but one of the reasons commuters has favored this mode of transportations. Uber and Grab have already invaded the transportation industry in other countries and they are not much different from taxi companies, so governments from the countries in which Uber and Grab operate imposed regulations on this new mode of transportation services. Philippines, as well, imposed regulations and policies upon the TNCs in accordance to the LTFRB Memorandum Circular Number 2015-015[xviii].

Land Transportation Franchising and Regulatory Board

As new modes of public land transportation are invented, there is in need of a regulatory board responsible for promulgating, administering, enforcing, and monitoring compliance of policies, laws, and regulations of public land transportation services. The Land Transportation Franchising and Regulatory Board were established to do so. The Land Transportation Franchising and Regulatory Board, abbreviated as LTFRB, have a century-old history of service in improving and supervising public land transportation. It was promulgated under Executive Order 202 by President Corazon C. Aquino on June 19, 1987. From being known as Coastwise Rate Commission, it has evolved into what we know nowadays as the Land Transportation Franchising and Regulatory Board or LTFRB. It has changed its agency name multiple times as time passed by, along with those changes in names, it carries different charter changes to improve its function as a regulatory board that is responsible for promulgating, administering, enforcing, and monitoring compliance of policies, laws and regulations on different modes of public land transportation, and to anticipate any future changes on the public land transportation[xix].

On the subject matter of future changes on the public land transportation, long after the establishment of LTFRB, there has been a new mode of public land transportation that “provides pre-arranged transportation services for compensation using internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles[xx]”. Such mode of public land transportation was just recently implemented by companies. Due to its recent implementation and its nature different from what we have known for a long time like taxi companies, it is not yet been fully regulated by the LTFRB.

LTFRB has several issues with Uber and Grab. One of these issues is about “colorum” operators and vehicles – those who are operating without permits from the government. Out of estimated 56,000 TNVs operators, only an estimated 15,000 are registered or franchised to their respective TNCs[xxi]. Transport Secretary Arthur Tugade said in a press briefing “Kailangan diyan may share din diyan ‘yung gobyerno, ‘yung kinikita doon. Kung kailangan may mekanismo at tsaka pamamaraan niyan na ‘yung plete na binabayaran o ‘yung kita na inaambag, eh ibahagi ‘nyo naman sa gobyerno.” (The government should have a share in their earnings. If needed, there should be a mechanism and a way that the government gets a share in the fares what [the drivers] get or what the share they contribute [to Grab and Uber]. You should give the government a share.) It was later clarified by LTFRB Chief Martin Delgra III that Transport Secretary Tugade was only referring to the “colorum” operators[xxii].

LTFRB cracked down on Uber and Gran and imposed fines of 5 million pesos for violations mainly due to “colorum” drivers[xxiii]. Uber and Grab cited in their defense that there have been a steadily increasing passenger’s needs on their transportation services. Transportation Undersecretary Thomas Orbos called out Uber and Grab andstated to the reporters before the meeting with the TNCs, “Don’t hide beyond the need; the need is there. Gobyerno tayo eh, naiintindihan natin na may pangangailangan, pero sandali lang. Hindi puwedeng gumawa ng illegal dahil may pangangailangan.” (We are the government; we know that there is a need, but wait a minute. You can’t do something illegal because there’s a need.[xxiv]) Though there has been an order issued from the LTFRB for the TNCs to suspend their “colorum” drivers as the Board is still in process of reviewing pending permits, Uber continued accepting new drivers and kept their “partners” in the road while Grab complied with the order. LTFRB then suspended Uber for 1 month which was met by the social media outrage of the commuters who use Uber as means to commute[xxv].

There was another issue asked by AKO BICOL Representative Rodel Batocabe posed to TNCs and the LTFRB during the hearing of the House committee on Metro Manila on July 25. He asked “If a crash happens involving a Grab or Uber driver, can the transport network companies (TNCs) be sued?” In LTFRB Memorandum Circular 2015-015, pointed out by LTFRB Chairman Martin Delgra III, says that the driver will be liable, not the TNC. Batocobe stated that the TNCs should also take part of the blame since they are accredited as “partners” with the drivers. He recommended LTFRB that they should issue a “remedial order” to strengthen the Memorandum Circular increasing the accountability of the TNCs. TNCs, in good faith and will, stated that they do reach out to their customers when struck by accidents. All clients who use their application and booked their ride through the application are insured by the Passenger Accident Management and Insurance Agency, which can amount up to 200,000 pesos per passenger[xxvi].

Furthermore, the LTFRB wishes to address the issue of surging price hikes especially during the Christmas rush when it was most significant[xxvii]. Commuters have complained to the LTFRB about the unreasonable price hikes being charged by the TNCs amounting up to 28,000 pesos for one ride[xxviii]. This was when recently, Uber supposedly changed their faring system from a “distance + time” pricing scheme to a “dynamic and upfront” payment system[xxix]. The LTFRB ordered an immediate cap on the surge price scheme of the TNCs limiting the maximum allowable fare price surge to “twice the rates for time covered and distance traveled, excluding the base fare.[xxx]” As of now, The LTFRB has not yet provided fare adjustments for the TNCs which regulate their faring system. One of the adjustments also includes the enforced mandatory 20% discounts for students, persons with disabilities, and senior citizens[xxxi].

The Issue

Different issues arose as the TNCs operated in Philippines. It made LTFRB more vigilant in studying TNCs in regulating their franchises.Now, the question can now be answered with more certainty through the extensive research laid down in this paper.

Is LTFRB correct in considering/including/regulating Uber and Grab in the definition of TNC according to LTFRB Memorandum 2015-015 in providing software platform for predetermined fares in transportation services?

YES! It would be unfair for other transportation service companies as they are subjected to the laws, policies, and regulations imposed by the LTFRB. This is especially true to the taxi companies as they have similarities with the TNCs. Philippine National Taxi Operators Association (PNTOA) President Jesus Manuel Bong Suntay said that it was unfair to them that the TNCs are given leeway, while local taxi operators are given difficulties with getting their licenses[xxxii].

Regulations would be also beneficial for the commuting public. The commuters would have a specific government agency for them to report their complaints against the TNCs. Before the LTFRB Memorandum Circular 2015-15 which defined the Uber and Grab as TNCs that regulated these companies under the LTFRB, passengers who use these TNCs’ internet-based applications could only effectively complain in social media. Passengers could only hope that the TNCs would actually listen and answer complaints. With the LTFRB, passengers would have a place to formally file their complaints against arrogant antics from TNV drivers which are partnered with TNCs. A complaint was voice out in social media on how a TNV driver cut her trip short, leaving the passengers nowhere near their destination in a rainy weather[xxxiii]. Another incident was on how a TNV driver molested his sleeping female passenger[xxxiv].

Franchising TNCs would also mean that they are now subject to the Philippine Civil Code. Under Article 1732 of the Philippine Civil Code, TNCs are now considered as “common carriers[xxxv].” Furthermore, they are bestowed with responsibilities stated in Article 1760[xxxvi], and Article 1763[xxxvii]. TNCs are also liable to the deaths or injuries sustained by the passengers, as stated in Article 1759[xxxviii]. Thus, resolving the issue on legal accountability.

“Let’s face it, something good came out also – we gave the people an alternative. The taxi industry is stepping up because of them, so all in all, we just have to go to this process of discussing this in a more open manner,” Transportation Undersecretary Thomas Orbos said[xxxix]. Though there is a need for a speedy franchising process for the TNVs, the government must not make light of imposing laws, policies, and regulations to ensure that there will be no loose ends. It would then solve the issue with “colorum” TNV drivers.

Foreign companies who wish to conduct businesses within the Philippine territory are subject to the Philippine Law. They must obey laws and regulations imposed by the government, same as how local businesses obey them. These TNCs are not exceptions to the rule. Though the LTFRB may be harsh on them, the law must be followed. The LTFRB does not disregard the pleas of the TNCs. These TNCs have given beneficial effects to this country’s problem of traffic congestion and public commuting. The law must be fair to all who live or sojourn in this country, just as how the LTFRB has exhibited its duties and functions.

[i] Manila North Tollways, “MNTC First Semester Result”, http://www.mntc.com/news-and-events/mntc-first-semester-results (accessed September 29, 2017)

 

[ii] Toll Regulatory Board, “Skyway”, http://www.trb.gov.ph/toll-road-projects/skyway (accessed September 29, 2017)

 

[iii]Philippine Statistics Authority, “Transportation: Philippine Yearbook 2013”,https://psa.gov.ph/sites/default/files/2013%20PY_Transportation.pdf (accessed September 29, 2017)

 

[iv] Jon Viktor D. Cabuenas, “PHL economy is losing big time on traffic jam”, gmanetwork.com, December 11, 2015 , http://www.gmanetwork.com/news/money/economy/547564/phl-economy-is-losing-big-time-on-traffic-jam/story/ (accessed September 29, 2017)

 

[v]MMDA Regulation No. 96-005

 

[vi] Miguel R. Camus, “Bus rapid transit expected to ease Edsa traffic”, inquirer.net, December 11, 2016 http://newsinfo.inquirer.net/852538/bus-rapid-transit-expected-to-ease-edsa-traffic (accessed September 29, 2017)

 

[vii] Department of Public Works and Highways, NLEX-SLEX Connector, http://www.dpwh.gov.ph/dpwh/PPP/projs/NLEX-SLEX (accessed September 29, 2017)

 

[viii] Railway-technology.com, Manila Light Rail Transit Line 1 (LRT-1) Cavite Extension, Philippines, http://www.railway-technology.com/projects/manila-light-rail-transit-line-1-lrt-1-cavite-extension/ (accessed September 29, 2017)

 

[ix] Louella Desiderio, “LRT-2 East extension project breaks ground”, philstar.com, June 1, 2017, http://www.philstar.com/business/2017/06/01/1705439/lrt-2-east-extension-project-breaks-ground (accessed September 29, 2017)

 

[x] Katerina Francisco, “What’s the fuss about the Grab, Uber regulation issue?”, rappler.com, July 28, 2017, https://www.rappler.com/newsbreak/iq/176933-you-need-to-know-fuss-grab-uber-ltfrb-regulation-explainer (accessed September 29, 2017)

[xi] Wikipedia, Uber, https://en.wikipedia.org/wiki/Uber_(company)#History (accessed September 29, 2017)

 

[xii] Grab, “Forward Together”, https://www.grab.com/ph/about (accessed September 29, 2017)

 

[xiii] Jan Escosio, and Yuji Vincent Gonzales, “LTFRB suspends taxi after driver hurt passenger with samurai sword”, inquirer.net, January 14, 2016, http://newsinfo.inquirer.net/755459/ltfrb-suspends-taxi-after-driver-hurt-passenger-with-samurai-sword (accessed September 29, 2017)

 

[xiv] LTFRB Memorandum Circular No. 2015-015

 

[xv] Department Order No. 2015-015

 

[xvi] Paronda, A., et. al., “Comparative Analysis of Transportation Network Companies (TNCs) and Conventional Taxi Services in Metro Manila”, http://ncts.upd.edu.ph/tssp/wp-content/uploads/2016/08/Paronda-et-al.pdf (accessed September 29, 2017)

 

[xvii] Patrick D. Nistal and Dr. Jose Regin F. Regidor, “Comparative Study of Uber and Regular Taxi Service Characteristics”, http://ncts.upd.edu.ph/tssp/wp-content/uploads/2016/08/Nistal-Regidor.pdf (accessed September 29, 2017)

 

[xviii] LTFRB Memorandum Circular No. 2015-015

 

[xix] Executive Order No. 202, s. 1969

 

[xx] LTFRB Memorandum Circular No. 2015-015

 

[xxi] Rambo Talabong, “Ex-chairman Ginez urges LTFRB: Listen to Uber, Grab users”, rappler.com, July 18, 2017, https://www.rappler.com/nation/175975-former-ltfrb-chairman-ginez-listen-uber-grab-users (accessed September 29, 2017)

 

[xxii] Rambo Talabong, “LTFRB clarifies: Tugade wants share in Grab, Uber taxes”, rappler.com, July 20, 2017, https://www.rappler.com/nation/176218-clarification-tugade-grab-uber-income-share-taxes (accessed September 29, 2017)

 

[xxiii] Claire Jiao, “LTFRB fines Grab, Uber ₱5 million each for violations”, cnnphilippines.com, July 12, 2017, http://cnnphilippines.com/news/2017/07/11/LTFRB-fines-grab-uber-5-million-pesos-each-for-violations.html (accessed September 29, 2017)

 

[xxiv] Rambo Talabong , “DOTr Usec to Grab, Uber: ‘You can’t do something illegal to fill a need’”, rappler.com, July 19, 2017, https://www.rappler.com/nation/176043-dotr-usec-orbos-grab-uber-need-illegal (accessed September 29, 2017)

 

[xxv] Katerina, Francisco, “TIMELINE: Why only Uber is suspended”, rappler.com, August 17, 2017, https://www.rappler.com/newsbreak/iq/178757-grab-uber-ltfrb-suspension (accessed September 29, 2017)

[xxvi] Rambo Talabong, “Grieving lawmaker demands Grab, Uber legal accountability”, rappler.com, July 25, 2017, https://www.rappler.com/nation/176714-grieving-lawmaker-demands-grab-uber-legal-accountability-ltfrb (accessed September 29, 2017)

 

[xxvii] Atty. Dodo Dulay, “Stricter regulation of Uber and Grab by LTFRB”, manilatimes.net, December 27, 2016, http://www.manilatimes.net/stricter-regulation-uber-grab-ltfrb/303804/ (accessed September 29, 2017)

 

[xxviii] Jovic Yee, “LTFRB caps Uber, Grab surge prices”, inquirer.net, December 28, 2016, http://newsinfo.inquirer.net/857289/ltfrb-caps-uber-grab-surge-prices (accessed September 29, 2017)

[xxix] Atty. Dodo Dulay, “Stricter regulation of Uber and Grab by LTFRB”, manilatimes.net, December 27, 2016, http://www.manilatimes.net/stricter-regulation-uber-grab-ltfrb/303804/ (accessed September 29, 2017)

 

[xxx] Jovic Yee, “LTFRB caps Uber, Grab surge prices”, inquirer.net, December 28, 2016, http://newsinfo.inquirer.net/857289/ltfrb-caps-uber-grab-surge-prices (accessed September 29, 2017)

 

^[xxxi] Raoul A. Villegas, “The entry of transport network companies (TNCs)”, pwc.com, February 23, 2017, http://www.pwc.com/ph/en/taxwise-or-otherwise/2017/entry-of-tncs.html (accessed September 29, 2017)

 

[xxxii] Chrisee Dela Paz, “PH taxi industry protests new rules”, rappler.com, June 4, 2015, https://www.rappler.com/business/industries/208-infrastructure/95290-philippine-taxi-industry-dotc-uber (accessed September 29, 2017)

 

[xxxiii] Josh Bianc, “Violinist John Lesaca Slams Female Uber Driver For Being “Unprofessional””, philnews.ph, July 04, 2017, https://philnews.ph/2017/07/04/john-lesaca-slams-female-uber-driver/ (accessed September 29, 2017)

 

[xxxiv] Jay Nelz, “Uber Driver ‘Jay Ram’ Molests His Sleeping Female Passenger Went Viral”, philnews.ph, April 8, 2017, https://philnews.ph/2017/04/08/uber-driver-jay-ram-molests-sleeping-female-passenger-posted-facebook/ (accessed September 29, 2017)

 

[xxxv] Article 1732 of the Philippine Civil Code “Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.”

 

[xxxvi] Article 1760 of the Philippine Civil Code ”the common carrier’s responsibility prescribed in the preceding article cannot be eliminated or limited by stipulation, by posting of notices, by statements on the tickets or otherwise”

 

[xxxvii] Article 1763 of the Philippine Civil Code “A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission”

 

[xxxviii] Article 1759 of the Philippines Civil Code “common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. The liability off the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees”

 

[xxxix] Rambo Talabong , “DOTr Usec to Grab, Uber: ‘You can’t do something illegal to fill a need’”, Rappler.com, July 19, 2017, https://www.rappler.com/nation/176043-dotr-usec-orbos-grab-uber-need-illegal (accessed September 29, 2017)

 

Collaboration Towards A Better Transportation Services

Rafael L. Banga-an

 

Over the past few days, Filipino commuters took the social media to express their anger, annoyance and frustration over the news that the operations of Transportation Network Comapnies (TNCs), Grab and Uber, may be adversely affected following the reports that the Land Transportation Franchising and Regularoty Board (LTFRB) will be apprehending unauthorized drivers of these TNCs having expired or no Provisional Authority (PA) or Certifcate of Public Convenience (CPC) franchise and stop issuing permits to TNCs.

This issue has ignited a ferocious debate of whether or not Grab and Uber must stop the operation of their unatuhorized drivers and suspend the issuance of permits after these transport network vehicle services (TNVs) deployed drivers beyond the number they were allowed, with commuters saying that the TNCs are essential to metro life and much more reliable than an ordinary taxi, while LTFRB insists that these need to be regulated to ensure accountability. Convenience of the riding public should be the prime consideration as government provides and improves services. The LTFRB promised before to draft new regulations, which it has so far failed to do. Worse, it lost the companies’ accreditation papers. Now it’s saying perhaps these drivers should have minimum working hours or that government should tax them. LTFRB and Transport Network Vehicle Services (TNVS) both have faults which caused this brouhaha. LTFRB should have approved or rejected applications faster. TNVS on the other hand shouldn’t have allowed units which have no papers at all into their system.

During the transportation committee hearing at the House of Representatives last August 2, 2017, it was found out that over 100,000 car owners were registered by Uber and Grab compared to the approved 2500 cars for Uber and 3000-4000 cars for Grab. Incumbent LTFRB Chairman Martin Delgra III lamented that Uber and Grab during a previous hearing with the LTFRB said each of these companies only have 28,000 vehicles plying Metro Manila streets.

“During the July hearing, they have about 28,000 more or less each. And today, they’re saying twice or more than twice as many. That’s why we say we are shocked,” Delgra said.

“The number we heard today… These are the data we’ve been trying to get since last year, because we need to understand precisely the issue of accountability,” he added.

Uber’s public policy director Damian Kassabgi for his part said as much as 60 percent of Uber drivers do not go full time, and that only less than 10,000 vehicles drive for the ride-sharing services at any point. The sheer number of registered Uber vehicles in Manila does not mean it is equivalent to one ride-sharing car per one taxi, belying criticisms that the deluge of transportation network service vehicles worsened the traffic in the metropolis.

“We seem to be getting stuck to the numbers, this and that. I want to make it clear, that one taxi is not equivalent to one ride sharing car… What’s relevant is how many cars are at any one point,” Kassabgi said. Moreover, he added that Uber only deploys enough number of vehicles to meet the riders’ demand.

“60 percent of our drivers do not see themselves as full time drivers. Many drive for less than 10 hours a week. One taxi car is equivalent to one ride sharing car is simply not true.. It’s important not to get stuck on the numbers here,” he added.

Cu added that Grab only deploys enough vehicles to meet the demand numbering around five percent. “As of now the numbers we accredited, they don’t ply the roads on an hourly basis…. If we don’t grow supply by three percent a week, then there would be passengers who would not get a ride,” Cu said.

 

Background of the Issue

Grab and Uber started its operation last July 30, 2013 and February 11, 2014 respectively and right at the start it seemed like the LTFRB didn’t want them to operate without the proper franchising. “We will contact them to stop them and they will be called to a public hearing and be issued a show-cause order,” LTFRB chair Winston Ginez told InterAksyon.com.

“They are a public service and they have to secure a franchise. What they are doing is a criminal violation of the public service law. They are reckless and they should have consulted us first,” Ginez added.

On the 15th day of August 2015, LTFRB Chairman Winston Ginez, speaking at a dinner attended by Philippines Star editors said that Uber Philippines was summoned by his agency to respond to the complainst of a local taxi industry for its “colorum” operation in the Metro. Such summon was done after several months from the operation of TNC’s because LTFRB needs someone to complain first.

LTFRB conducted sting operation against an Uber driver last October 23, 2014. The complainant booked a trip using Uber to Metrowalk in Pasig City to the Quezon Memorial Circle and paid Php 350 according to Dennis Barrion, chief of staff of LTFRB’s Executive Director Roberto Cabrera. The driver of the Black Toyota Fortuner with plate number WII 360 was apprehended by waiting enforcers of the LTFRB and the LTO, and his license confiscated and the vehicle impounded for franchise violation under Joint Administrative Order 2014-01 wherein the colorum vehicle faces a penalty of P200,000. According to Ginez, the operation wasn’t aimed at Uber, but at the vehicle that was used by the app.“Uber doesn’t need to secure a franchise because it’s not a transport company, they don’t carry passengers. But through its application, private unlicensed vehicles are able to engage in public land transportation without securing a franchise from LTFRB,” Ginez said.

On May 8, 2015, Department of Transportation and Communication (DOTC) released Department Order No. 2015-11, signed by Honorable Secretary Joseph Emilio Aguinaldo Abaya, that authorized the creation of TNCs as a new transport category and mandating LTFRB to promulgate the relevant implementing Memorandum Ciruclar within thirty (30) days. Ride-hailing services Grab and Uber are considered Transportation Network Companies (TNCs) and vehicles under them and other similar ride-sharing services are considered part of the Transportation Network Vehicle Service (TNVS) wherein the TNVS are the vehicles that provide pre-arranged transportation services for compensation.

Pursuant to DOTC Department Order No. 2015-11, LTRFB released Memorandum Circular No. 2015-15 establishing the rules and regulations to govern the accreditation of Transportation Network Companies (TNCs). LTFRB accredited Grab and Uber in July 2015 and August 2015 respectively. To further set the guidelines in the accreditation of TNCs, LTFRB Memorandum Circular No. 2015-16 was also issued for the terms and conditions of the certificate of the TNC accreditation. The TNCs are also required to screen and accredit their drivers and register them with the LTFRB. The LTFRB, meanwhile, is in charge of issuing permits to TNVS drivers: the provisional authority (PA), or a temporary permit valid for 45 days, and the Certificate of Public Convenience (CPC) franchise, which is valid for a year.

On July 21, 2016, the LTFRB released Memorandum Circular 2016-008, which suspends the acceptance and processing of applications for Uber, Grab, and other ride-sharing services.The order essentially stopped the release of temporary permits to Grab and Uber vehicles while the LTFRB further studied how to regulate the growing industry.

On July 11, 2017 the LTFRB ordered Grab and Uber to pay a fine of P5 million each for letting drivers with no permits or expired permits to still operate on their platforms. Grab and Uber admitted that they accepted new drivers despite the LTFRB’s earlier order, citing strong passenger demand. Both companies said about 80% of their active drivers don’t have a PA or CPC franchise. But some Grab and Uber drivers say it’s not their fault they are considered “colorum.” They point to the LTFRB’s earlier order stopping the processing of TNVS applications. They also claimed that some 7,000 drivers who were already accredited did not get their PAs renewed last year. Because of this, many drivers had expired PAs by the end of 2016.

Aside from the hefty fine, the LTFRB also ordered Grab and Uber to clear out unregistered drivers by July 26 or face more fines but Grab and Uber filed separate motions for reconsideration. The LTFRB later agreed not to apprehend unregistered TNVS until it decides on the appeal. While this came as a relief to Grab and Uber users and drivers, this decision did not sit well with operators of taxis, jeeps, and vans: they slammed what they called the LTFRB’s preferential treatment, saying they too should be spared from apprehension while waiting for the approval of their franchise applications.

For the LTFRB, the problem began with Grab and Uber. LTFRB chief Martin Delgra III said the TNCs may have deliberately withheld telling their “partner drivers” to come to the LTFRB to get a franchise before operating. And despite public outrage on social media, the LTFRB said it’s standing firm on its position, saying the TNCs should explain to their peer operators why they were allowed to operate on the platform even without the proper permits.

LTFRB spokesperson Aileen Lizada also said that Uber and Grab trips represent a “minority” in the total number of trips in Metro Manila – they account for only 2% of the 21.5 million trips per day recorded in 2015. But despite this, the LTFRB also acknowledged that the riding public will be harmed if it simply cancels the accreditation of the TNCs. Adding to the controversy were statements made by Transportation Secretary Arthur Tugade, who said that the government should have a share from the income of Grab and Uber. The LTFRB later clarified that Tugade was referring to the unregistered vehicles. Stoking more reactions was LTFRB’s admission that it lost the accreditation papers of Grab and Uber. The two companies’ accreditations are still pending renewal.

Argumentation

Uber and Grab has become an integral part of the life of the people in metro. And over the past few years, they have provided good quality costumer experiences, easy way around anytime and anywhre, low cost luxury and promotes safety and security that resulted in an increased demand of the commuting public. Safety and security is everybody’s concern. We all wanted to be safe and all times in all places. In the Maslow’s Hierarchy of Needs, Safety and Security follows after the physiological needs wherein an individual would want to ensure if his physiological needs were met. This is the most important aspect in Uber and Grab that promotes safety and security of its passengers with the application being used in its operation wherein there is proper identification of its drivers as well as its real time location of the vehicle. Moreover, the passenger also knows the identity of the driver before it reaches him or her. The OR / CR of the vehicle is also stored in the network of these TNC’s that could be of great help in case there are incidents that needs to be investigated. In short, all the necessary information regarding the driver and vehicle is known unlike taxi’s wherein such information can’t be accessed at any time. On the other hand, the passenger’s identity is also known and recorded with the TNC’s network in order to provide safety and security in behalf of the driver and the vehicle. The information provided benefits both parties. Most of the times, people riding in taxi’s doesn’t really check on the taxi’s they are riding. Moreover, there are a lot of complaints that were noted involving taxi’s wherein violations are rampant. I am an Uber rider and I can say that they consistently have high quality service. It makes me feel comfortable during the whole ride, no matter how long they may take me from point A to point B. The cars are clean and comfortable and the driver does everything to make sure that I am able to enjoy it. Commuting can be a little bit of a pain at times, and because of that, Uber wants to make sure that I feel like I am driving in style, no matter what sort of car I am in for the drive. Suspension and/or revocation of permit to operate for TNC’s is a pain in the ass for commuters who would want to have a comfortable ride.

TNCs like Uber and Grab has contributed to sustainable transport. In a way that it supplements urban public transit. Riders choose TNCs as alternative mode of transport due to the unavailability of public transport such as LRT and MRT during midnight. Hence, TNCs like Uber and Grab can be a substitute to public transit during midnight and on other special holidays and occasions when the ridership is already low. Extended operation of public transit with limited number of passengers is not economically efficient. Also, when ride-sharing principle like uberpool is applied, it can contribute to sustainable transport by increasing the occupancy rate of the TNC unit which in turn reduces car use that will help improve traffic congestion.Moreover, the competition with taxi service benefits the passengers. The healthy competition between TNCs and traditional taxi will help improve the services of taxi. TNCs will not replace the traditional taxi but the competition will benefit the consumers. It will force the taxi companies to start investing in modern services and upgrading of its fleets which will make it more environmental friendly. Additionally, in a sustainable urban transport, policies in improving safety and security of passengers is important. TNCs like Uber and Grab promotes safety and security of their passenger through features of their applications like driver’s identification and rating, vehicle details and route tracking.Finally, the use of Intelligent Transport System (ITS) and Information Communication Technologies (ICT) through online application helps manage transport demand. Since the location is pre-determined for TNCs, it avoids unnecessary travel and reduce trip distance unlike in taxi where the pick-up point is undetermined. Thus, the use of Intelligent Transport System (ITS) and Intelligent Communication Technologies (ICT) through the TNC application improves the management of transport demand and supply of passengers.

In the report of Transit Cooperative Research Program (TCRP Report) 108 (Ball A., Et. Al, Transportation Research Board, TCRP Report 108, Car-Sharing: Where and How It Succeeds, 2005), the impact of TNCs with regards to Car-sharing concept bears good impression and effect in; 1) Vehicle Ownership – reduced vehicle ownership can lead to increased parking availability 2) Vehicle Travel – reduced vehicle travel, strong financial incentive to drive less, non-car owners can use service to make vehicle trips, improves mobility 3.) Lower emission, – car-sharing reduces emissions by cutting vehicle travel and the use of newer, fuel-efficient vehicles. 4) Increased transit ridership – by reduction of vehicle travel, car-sharing shifts some trips to transit. 5) Cost Savings – saving money on transportation is the reasons why many households and business joins car-sharing 6) Greater Mobility – car-sharing allows people without a car to get to new places.

Resolution

We are now in the midst of computer technology generation and using it to improve the quality our lives is not against morality as long as it will not destroy the environment or anything that is related with it. LTFRB is doing in its wish to impose its authority and medieval mindset on Grab and Uber. Its pronouncements on the app-based riding services have confused more than clarify, raised questions more than answer them and agitated more than serve thousands of already harried urban commuters. Technology should serve to motivate us to do things better.

These are not the solution to the problem since it is very apparent that the services of Uber and Grab have been fully embraced by the Filipino commuters and the sovereignity of the Filipino people should prevail at all times. Yes, there are defficiencies and lapses that happened on both TNCs and the governement but these should not hinder the improvement opportunities along the way. The data collected over the years should help government better understand consumer behavior as well as the unaddressed weaknesses of the transport industry.

As to the unfairness issue with regards to the legitimate taxi’s who has franchise, the usage and implementation of the internet based application can also be done. Improve the services being rendered, review the fare hikes, and conduct deeper investigation regarding the constumer complaints received forcing commuters to choose Uber and Grab eventhough they will pay higher as long as they are safer and more comfortable.

Suspension, deactivation or apprehension of these unregistered Uber and Grab drivers is not the answer to the problem. LTFRB should acknowledge that the Philippines has a perennially weak mass transport system and TNCs can be of help to improve it. The things that happened over the past days should become the reference for improvement of the transportation industry. Proper comminication of both parties to address the it is the most important step to solve it, not to impose ones interest but to come up with an agreed resolution.

The pros and cons and all of the things stated herein should become the reason of a collaborative effort to improve the transportation services being rendered to the Filipino people. LTFRB should know better as what we learn every day in this new world, it is best to ride and confront change, not resist it.

References:

http://www.unbox.ph/wheels/from-launch-to-sting-ubers-controversial-history-in-the-ph/

http://newsinfo.inquirer.net/919650/number-of-uber-grab-vehicles-shocks-ltfrb

http://manilastandard.net/news/national/243441/house-holds-hearing-on-uber-and-grab-operations.html

http://www.cambridgema.gov/~/media/Files/CDD/Transportation/PTDM/PTDM_TCRP_108

REGULATION AND ACCOUNTABILITY ON THE NEW ERA OF TRANSPORT SERVICE

DEROGONGAN, NORHAIMA B.

 

Transportation is vaguely defined as a system or means of moving people or goods. [i] In our country and in others, it is subsequently divided into two categories, public and private transportation, both having their share of upsides as well complications. The streets of Metro Manila and nearby cities is fast becoming overcrowded due to a combination of poorly planned and built street and highways and a staggering number of private and public vehicles resulting in the inconvenience of every driver and commuter on a daily basis.

Transportation can be considered as backbone and a vital part of the economy of the country. Workers and labourers having a means of going to work and going home from work as well as the delivery of goods and services from point A to point B is of utmost importance because it assures the flow of business in the country.

However, the Government, for the longest time, have failed in delivering an efficient, effective, sustainable and safe mass public transportation mainly because of corruption in the ranks, as well as below par strategies to mend the everyday commuters struggle. Because of this continuing dilemma with regard to transportation, the emergences of different types of conventional and non-conventional forms of the transportation have become more apparent. In addition, car dealerships have taken advantage of this situation by offering low downpayment ownership of other vehicles. The people cannot be blamed if they continue to create, find and patronize new modes of transportation that suits them, hence the arrival of Transport Network Companies (TNCs) and the rise in number of the Transport Network Vehicle Service (TNVS).

With the on-going issues with regard to public transportation, proven by the hundreds of testimonies and complaints in relation to experiences when riding public buses, jeeps and taxis, all revolving around driver behaviour, travel safety and overall experience of their trip, it cannot be denied the relief our commuters experienced ever since Grab and Uber was introduced as an alternative to public transportation. With continued advancement in technology, TNCs have taken advantage of this format to secure a form of transportation service that is both accessible to many without comprising on the premium experience one can have when availing these types of services. Their service can be easily requested by using their mobile app which is not available in ordinary modes of transport. We no longer have to stand under the heat and wait for an available taxi to pick us up or wrestle our way through a crowd waiting for the next available PUVs to arrive. It can also pick us up exactly where we are which makes it safer especially when we are in a less populated or secluded area. We can easily track the location of the driver and know exactly when it will arrive. When it comes to safety, we can readily view the driver’s profile and know his or her contact information and the vehicle details, as well his ratings and comments from previous passengers regarding their experience with the same driver. Payment is flexible because we can either pay by cash or by card. They also offer discounts and promos even on an ordinary day. Finally, no more haggling, because we can view our fixed fare even before requesting the ride. In that way, we no longer have to worry about the traffic and any excess fare that we usually encounter using an ordinary taxi. We even receive receipts via email unlike an ordinary Public Utility Vehicle (PUV) which we usually get none.

First let us define the functions of each related agencies and its role in this case.

The Department of Transportation and Communications (DOTC) is the primary policy, planning, programming, coordinating, implementing and administrative entity of the executive branch of the government on the promotion, development and regulation of a dependable and coordinated network of transportation and communications systems, as well as in the fast, safe, efficient and reliable transportation and communications services. [ii]

In its effort to modernize transportation services, usher in the conveniences offered by technological innovation especially with the increasing demand for these services, the DOTC published new categories of public transport conveyances to allow app-based services to operate in the country.

The DOTC recognizes 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. These new classification includes the Bus Rapid Transit (BRT), the Airport Bus, the Premium Taxis and the Transportation Network Service Vehicle Service (TNVS).[iii]

According to DOTC Secretary Joseph Emilio “Jun” Abaya, the Transportation Network Vehicle Service (TNVS) classification will allow app-based services offered by Transportation Network Companies (TNC) to exist within their regulatory framework. [iv]

The Land Transportation Franchising and Regulatory Board (LTFRB) is an agency of the Philippine government under the Department of Transportation responsible for promulgating, administering, enforcing, and monitoring compliance of policies, laws, and regulations of public land transportation services. [v]

Under the new classification, a Transportation Network Company (TNC) is defined as an organization whether a corporation, partnership, or sole proprietor, that provides pre-arranged transportation services for compensation using an Internet-based technology application or a digital platform technology to connect passengers with drivers using their personal vehicles.[vi]  TNCs will provide the public with online-enabled transportation services known as a TNVS, which will connect drivers with ride-seekers through an app. The DOTC also imposes certain standards for vehicle eligibility under the new TNVS classification like the requirement of GPS tracking and navigation devices for convenience and safety. Only sedans, Asian Utility Vehicles (AUV), Sports Utility Vehicles (SUV), vans, or other similar vehicles will be allowed and a maximum age limit of 7 years will be enforced. The TNCs are required to screen and accredit their drivers and register them with LTFRB.

TNCs are required to secure a Certificate of Accreditation which is valid for 2 years. [vii] These TNCs are also subject to certain terms and conditions by the LTFRB. TNCs are obligated to screen and accredit their drivers and register them with the LTFRB. Meanwhile, the LTFRB is in charge of issuing TNVS drivers with permits such as Provisional Authority (PA) or temporary permit which is valid for 45 days, until they receive their Certificate of Public Conveyance (CPC) which is valid for a year.

Ride-hailing services Grab and Uber are considered Transportation Network Companies (TNCs), based on new transport categories created by the government.

Uber’s story began in Paris in 2008 when two friends, Travis Kalanick and Garrett Camp, had trouble hailing a cab. So they came up with a simple idea – tap a button, get a ride. It started as an app to request premium black cars in a few metropolitan areas and is now changing the logistical fabric of cities around the world. Its headquarters is located in San Francisco and is now operating in 632 other countries worldwide. It operates through a smartphone application that connects drivers and passengers. [viii]

Uber offers various service levels which depends on the country it operates. Here in the Philippines, we can avail of UberX, UberPool and UberXL. UberX is a level of service in which the rider will get a private ride and can accommodate up to four (4) people, UberPool is the least expensive level of service in which the customer may share the ride with another passenger going in the same general direction and UberXL uses a SUV for groups up to six (6) or for people who need room for a lot of luggage. [ix]

On the other hand, Grab, then Myteksi, was founded in Malaysia by Anthony Tan in 2012. It is now present in six (6) countries across the region. [x] It offers GrabCar, GrabShare and GrabTaxi which has the same services as those of Uber. GrabTaxi lets users find available taxis in their area, connect with the driver, and get fare estimations ahead of time. According to Tan, the app is averaging seven bookings per second.[xi]

GrabCar, the private hire vehicle booking service available through the GrabTaxi app, is the first service of its kind in the Philippines to be fully accredited as a TNC by the LTFRB on July 2015 [xii] while Uber, Uber Systems, Inc. (USI), as a company, was accredited by LTFRB as a TNC on August 19, 2015 [xiii]

Uber and Grab are two of the leading app-based vehicle service providers that we have right now. They have been saving a lot of people from the stress and hardship of commuting in their everyday lives. They are easy to book and to monitor just by a few tap on their mobile devices. They have been providing the riding public a convenient and efficient service. Thus, they hit off as soon as they were established.

With all the benefits and convenience TNCs through TNVS are able to provide, then why the sudden tightening of the straps by the LTFRB when it comes to TNCs. Even more intriguing is whether the LTFRB is lawfully allowed to control or regulate TNCs, which is the technology behind ride-hailing.

On July 2016, the LTFRB Board suspends the acceptance of all TNVS applications proposing to ply on the route within Metro Manila or entering Metro Manila. Its Technical Division is directed not to accept any TNVS application upon the effectivity of this Circular.[xiv] Instead of stopping the acquisition of new TNVS providers by Grab and Uber, they continued accepting drivers with no permits or expired permits.

LTFRB chief Martin Delgra III said that the TNCs may have deliberately withheld telling their TNVS to come to LTFRB to get a franchise before operating, [xv] encouraging TNVS to be colorum. However, there is a difference between the colorums that we are familiar with (unmarked vans, vehicles with duplicate plates), and the colorums from the TNCs. The former is avoiding to pay the proper fees and registrations, while the latter is willing and on the process of application and registration, however, delayed due to the same agency system they are trying to comply with.

Grab and Uber each paid a PhP 5 million fine for failing to comply with various terms and conditions stated on the certificate of accreditation under the Memorandum Circular Number 2015-016.[xvi] Grab and Uber admitted that they accepted new drivers despite the LTFRB’s earlier order due to a strong passenger demand.

But does LTFRB has the right to regulate the TNC and the TNVS?

The authority to regulate the operation of public land transportation vehicles and grant franchises belongs to the LTFRB. The Board’s function includes the issuance, amendment, revision, suspension and the cancellation of Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefore. [xvii]

As one of LTFRB’s function, TNCs should be required to be accredited so that the state can properly exercise its regulatory powers to promote public safety and welfare of the commuting public.[xviii]

During the hearing conducted by the House committee on Metro Manila development chaired by Rep. Winston “Winnie” Castelo (2nd District, Quezon City), House members took turns interpellating LTFRB officials and Uber and Grab executives on their policies, pointing out that the services being offered by the TNVS involve public interest. In his preliminary remarks, Castelo said that the hearing was called to discuss the guidelines of the LTFRB on TNVS such as Uber and Grab, particularly those operating in Metro Manila, and eventually come up with legislation on the operation of the TNVS. [xix]

TNCs are considered as IT companies and just the platform for TNVS to operate. However, categorizing TNC as an IT company alone is a little misleading. Yes it correct that TNCs are IT companies; however, they are an IT company whose sole existence is to service the transport industry, even if they are only providing the technology to connect drivers to commuters. They can be considered as indirect operators or middlemen, where in they do not own any of the TNVS used, but still they earn from them by facilitating in the transport process. As to any order individual, group, or company serving the interest of the public, regulation or a means of checks and balance is needed to make certain that the people patronizing the said service gets their money’s worth well as ensure the safety of riding public.

Under the current status of TNC and TNVS in our government, in case of accidents or any untoward incident on Grab and Uber vehicles, there is no governing rules or guidelines with regards to their accountability and liability to its passengers. Thus, a passenger cannot file a case against Grab and Uber since it is only a technology platform and not a transport provider. Since Grab and Uber profits from this service it is only proper that they should be held responsible with the actions of its drivers. If they are left unregulated then it automatically opens the floodgates for the operation of unsafe vehicles and unqualified drivers.

There’s an instance in Singapore where the nephew of AKO BICOL Representative Rodel Batocabe was killed in a car crash while riding Uber. He raised a question during a hearing of the House Committee that if this incident happened here in the Philippines then who can they sue. LTFRB chairman Martin Delgra III pointed to Batocabe to Memorandum Circular 2015-015, which says that the driver, not the TNC, will be liable. [xx] But shouldn’t TNC be also responsible in this scenario since they are the ones who accredit their drivers?

LTFRB spokesperson Aileen Lizada pointed out that under existing laws and the business design of TNCs, Uber may not be charged in case it gets into an accident that results in a passenger’s death. She added that the LTFRB would still need to communicate with the firms to verify plate numbers if it is registered with them and get all the information they needed before they can proceed with any action. [xxi]

Though it is important to observe that the said regulation of the TNCs, it should not hamper the growth of the said industry. The LTFRB should make sure that if they implement a certain rule with such meticulousness similar to what they are doing to the TNCs, they should have the same persistence in implement the same rules to others. Safety being their main concern regarding the regulation of TNCs and TNVS, the LTFRB should strictly implement the annual inspections on Public Utility Vehicles to make sure that they comply on the same standards they are demanding from the TNCs and TNVS. In addition, the drivers of the said PUVs should also be retrained and medically checked to guarantee that each one is fit to handle and perform their said duties as captains of the PUVs. The agency should maintain the same vigilance on hunting down buses, jeepneys and taxis with no franchises, fake plates and franchise, ones lacking other important permits and document required to be considered as a legitimate PUV.

Nevertheless, with the advancement of technology and future innovations, our government should regularly review its existing regulations and policies to ensure that it is up to date and it can easily adopt to the said changes while ensuring that protection and safety is properly addressed.

 

 

 
[i]Cambridge Dictionary. ”Transportation”, http://dictionary.cambridge.org/dictionary/english/transportation (accessed September 30, 2017)
[ii] Department of Transportation. Transparency, http://dotr.gov.ph/18-transparency/166-dotc-mandate.html (accessed September 17, 2017)
[iii] DOTC Department Order No. 2015-011, which amended Department Order No. 97-1097
[iv] “In PH, Uber, GrabTaxi get license to work nationwide”, Rappler, May 12, 2015, https://www.rappler.com/business/industries/208-infrastructure/92762-dotc-new-classification-app-based-transportation-services (accessed September 13, 2017)
[v] Land Transportation Franchising & Regulatory Board, About Us, http://ltfrb.gov.ph/main/aboutus (accessed September 17, 2017)
[vi] Land Transportation Franchising & Regulatory Board. Memorandum Circular Number 2015-015
[vii] Land Transportation Franchising & Regulatory Board, Memorandum Circular No. 2015-015
[viii] “Our Story”, Uber, https://www.uber.com/en-PH/our-story/
[ix] “Ride”, Uber, https://www.uber.com/en-PH/ride/
[x] “About”, Grab, https://www.grab.com/ph/about/
[xi] Freischlad, Nadine. “Three years, $340M funding, millions of users: GrabTaxi’s Anthony Tan reflects on the journey”, Techniasia, May 8, 2015. https://www.techinasia.com/3-years-4-funding-rounds-grabtaxis-anthony-tan-reflects-journey (accessed September 27, 2017)
[xii] Press Centre, Business, “GrabCar First and Only Transport Network Company Legalized by the Philippine Government”, July 7, 2015, https://www.grab.com/ph/press/business/grabcar-first-and-only-transport-network-company-legalized-by-the-philippine-government/
[xiii] Admin. “Uber Manila Now LTFRB Accredited as a TNC!”, August 19, 2015, UBER MNL TIPS, http://ubermanilatips.com/uber-manila-now-ltfrb-accredited-as-a-tnc/ (accessed September 27, 2017)
[xiv] Under LTFRB Memorandum Circular 2016-008, dated July 21, 2016
[xv] Francisco, Katerina. Rappler. “What’s the fuss about the Grab, Uber regulation issue?” July 28, 2017 https://www.rappler.com/newsbreak/iq/176933-you-need-to-know-fuss-grab-uber-ltfrb-regulation-explainer (accessed September 23, 2017)
[xvi] Bondoc, Marlly Rome C. GMA News Online. September 7, 2017. “LTFRB to extend franchise validity of Grab, Uber, U-Hop” http://www.gmanetwork.com/news/money/motoring/624886/ltfrb-to-extend-franchise-validity-of-grab-uber-u-hop/story/ (accessed September 30, 2017)
[xvii] Jay-r Ipac, “Uber, Grab and the law”, August 4, 2017, Business World. https://www.pressreader.com/philippines/business-world/20170804/281676844995136 (accessed September 27, 2017)
[xviii] LTFRB Functions. About us. http://ltfrb.gov.ph/main/aboutus (accessed September 30, 2017)
[xix] Alvin Santiago, “Public Welfare|House to LTFRB, UBER, GRAB: Public Safety is Important”. July 31, 2017. http://dwdd.com.ph/2017/07/31/public-welfare-house-to-ltfrb-uber-grab-public-safety-is-important/ (accessed September 30, 2017)
[xx] Rambo Talabong, Rappler, “Grieving lawmaker demands Grab, Uber legal accountability”, July 25, 2017, https://www.rappler.com/nation/176714-grieving-lawmaker-demands-grab-uber-legal-accountability-ltfrb

(accessed October 1, 2017)
[xxi] ABS-CBN News. “LTFRB on regulating Grab, Uber: We are not against innovation”, July 26, 2017. http://news.abs-cbn.com/news/07/26/17/ltfrb-on-regulating-grab-uber-we-are-not-against-innovation (accessed October 1, 2017)