UniversityDebunking the case: LTFRB vs. Transportation Network Companies
Debunking the case: LTFRB vs. Transportation Network Companies

Pre-organized transportation is one of the country’s peaks in terms of transport technology. As such, riding apps like Uber and Grab have taken the country by storm because of their viability as more convenient and efficient options in the Philippine transportation scene.

Civilians, especially students, have greatly imprinted on these ride-hailing services. Tricia Garcia* (IV, BS-PSYC) said that the system was “rider-friendly” from the application, rider, to the route algorithm. While Uber hails from San Francisco and Grab from Malaysia, the Philippines also adhered along the lines of innovation by developing U-HOP, the first app-based shuttle service in the country. To date, Uber Philippines has earned a net income of P5.9-million in 2015, indicating the popularity of the transportation application. Grab, on the other hand, which had 930,000 drivers in July, averages around 2.5-million rides per day.

 

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What transpired back in July

With the number of positive feedback that ride-sharing apps receive, the decision of the Land Transportation Franchising and Regulatory Board (LTFRB) to suspend Uber for one month beginning August 15 was met with criticism. More than being a trend, Uber has also become a lifestyle to many. Thus, the public backlash against LTFRB following the suspension of Uber was inevitable. This, however, does not substantiate a conclusion without hearing both sides of the coin. Opposing views are likely to happen without an awareness of the setting that Transportation Network Companies (TNCs), or service providers and operators of ride-sharing apps like Uber and Grab operate in. Majority fall into the neglect of mandated laws, regulations and parameters that are necessary to be followed by all public transportation vehicles.

The ruling on suspending Uber and other TNCs’ applications was not due to the intention of getting mere shares of income. Instead, LTFRB aims to target the compliance of these Transport Network Vehicle Service (TNVS) or lack thereof. In an interview with The LaSallian, Atty. Aileen Lizada, board member of LTFRB, gives her statements on the issue. “You bash, go ahead. Basta sa’min is, we think of the greater majority. We think of the riding public. We are here for the good rides, but more so for the bad rides,” she says.

In the country we’re living in, it’s hard to keep up with the demands of adults and students alike when it comes to commuting. The suspension compromised the riding public’s time and grit, leaving them with no other option than overpriced metered cabs. After the LTFRB proposed that Uber pay P190-million in exchange for lifting its suspension order in which the latter complied, relief was palpable throughout social media.

 

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Where the conflict started

To put the issue between the LTFRB and TNCs into context, Atty. Lizada gave The LaSallian a brief explanation behind the accreditation process for TNVS drivers, or vehicle owners who provide services via TNCs. “First, you get accreditation.  Second step, you get your franchise. Third step, you tell your TNC what your case number is so that they can put your franchise number and case number in the apps,” she says.

This has become a problem since TNCs are required to accredit drivers and register them with the LTFRB once they submit their requirements to them. In turn, the LTFRB’s job is to issue permits to the drivers, which includes the provisional authority (PA), or a Certificate of Public Convenience (CPC) franchise, which is valid for a year.

However, this is when non-compliance of TNCs would arise. They would skip getting a franchise and miss the case number which is a proof of legitimacy to riders. Lizada emphasizes that the case number should appear once a vehicle is booked. The driver’s name plate number, type of car, and picture that is commonly seen by the consumer is believed to be an assurance of their safety since this protocol differs from traditional modes of transportation. However, what the public fails to realize is the importance of the case number.  

“That is a safety measure on the part of the rider that the ride you are taking [has] a franchise, [and] is therefore legitimate; is therefore running under [the] government’s regulation,” Lizada says. All drivers under government regulation are insured by accredited insurance companies, and have presented documents supporting their income tax returns, locational garage, and NBI, Police, and ORCR clearances.

By skipping this step in the accreditation process, TNCs disregarded the regulations put into place to ensure passenger safety. The screening process for becoming a driver may be a lot faster and easier, but what it generally does in effect is remove the TNCs’ liability in untoward incidents and damages.

At this point, the LTFRB does its job through reiterating in all its meetings that the organization will not dismiss the operators as long as they make the drivers comply with the requirements. As a result, TNCs have been a lot more compliant in adhering to the due process in the past few months. With the immediate increase of TNVS accreditation applications, the LTFRB issued Memorandum Circular 2016-008 to halt TNCs from accepting drivers until the LTFRB has had enough time to process all the applications submitted to them. Grab immediately complied with the LTFRB’s orders. Uber, on the other hand, continued accepting drivers, leading to them being apprehended and eventually suspended for non-compliance with the memorandum.

 

Uber in overseas countries

Uber has been a subject of a number of protests overseas. One of the recurring complaints against the company is its continued operation without proper registration, lack of liability in untoward incidents, and insufficient background check policies for its drivers, to name a few. An article published by the Harvard Business Review in 2017 highlights Uber’s business model and competitive advantage, which are allegedly grounded on illegality. Furthermore, cases in Brazil, Bulgaria, and Canada were highlighted to expose Uber’s illicit activities which stemmed from taxi drivers’ union, unfair trade practices, and multiple licensing infractions respectively. The trend is that there will always be a loophole regarding these ride-hailing services that are brought about by noncompliance.

 

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Extending beyond Uber and Grab

Atty. Lizada said that it was only during this time when TNCs felt the regulation, because it was deemed fit. The shared interest of the public towards TNVS is not enough reason for the regulatory board to exempt them from existing laws that all other transport vehicles in the country abide to.

LTFRB’s regulation has been focused on TNVS for the past few months, but Atty. Lizada clarified that all sectors of the transportation industry are subjected to the same rigorous standards. She reiterated that all taxi, bus, public utility vehicles (PUV) and jeepney drivers are included under this jurisdiction. Blurring the lines between TNCs and other traditional modes of transportation, both are services to the public that needs to be regulated. “You are now accepting paying passengers; therefore, you share the equal responsibility as we accredit you,” Lizada says.

The recurring complaints addressed to taxis has been a subject during the Uber suspension. Many questioned the regulatory board’s priorities, as it seemed too fixated on penalizing only Uber and Grab.

Althea Kalalo (III, AB-CAM) says she preferred the friendlier Uber drivers than reckless and demanding cab drivers. Eizel Sanches (IV, BS-MGT) shares the same sentiment as she met a similar incident during the suspension of Uber. She said, “When I was trying to get a taxi in Robinsons Manila to go to DLSU, all taxis were saying that it was a fixed cost of 150 pesos and that we had to pay additional since we were 4 and heavy, while in Uber, it was a fixed price of just 80 pesos.”

In the perspective of many, the quick response of these ride-hailing services, lack of ill-mannered drivers, and lack of immediate “patong” provide better consumer preference in comparison with metered cabs who sporadically increase the fare and reject riders.

In response to public reproaches received by LTFRB, they, in turn, developed a new program intended for all drivers in the transportation service industry. “Drivers Academy,” recently created in 2017, aims to hone the drivers’ decorum while on the public road. Lizada said that the transportation dilemma in the Philippines should be dealt with by all aspects of the transportation industry, including its consumers and especially its producers. She emphasized that “Nationwide, it is an effort.”

Drivers’ Academy is conducted every Thursday and Friday with topics that are not limited to road safety, but also includes proper grooming, hygiene, and disciplinary modules. Lizada mentioned that all regions in the Philippines operate the program and all drivers are mandatory to attend in order to claim their professional driver’s license. This is one of the new objectives that LTFRB proclaims, to properly educate drivers who are in service to the public through the Drivers’ Academy.  Lizada said that “You cannot drive a public utility vehicle if you do not pass this.” Besides the ongoing program, there are also exams that bring drivers to the next level, until Grade 3. “Para at least kayo, malaman niyo ang mga latest, ano ang dapat. It’s like putting everybody on the same page; talking about PUVs,” Lizada says.

Settling the issue between TNCs and LTFRB, starting with awareness about the protocols and laws that surround the country will go a long way. The public is not solely at fault for their lack of knowledge, but a mere miscommunication between the government and the public as the issue aggravated by the fact that there are also gaps in information dissemination.

It is crucial to understand that even if Uber and Grab are at the forefront of innovation in the transportation industry, their continued violation of transport legislation may incite other companies to do the same. Given that Uber is widely celebrated and successful, other businesses will inevitably see these kinds of infractions as nothing more than a little inconvenience. The rules and regulations stipulated by the LTFRB should be followed by all sectors of the transportation industry. These companies, whether publicly or privately owned, all provide transportation, and should therefore be considered as services to the public.

 

*Names with asterisks are pseudonyms.