OVER the last decade, the ride-hailing industry has taken the Philippines by storm, creating a seismic shift in the country’s transportation landscape.
Leveraging new technologies and connectivity, ride-hailing has revolutionized the way Filipinos commute and navigate the bustling streets of the archipelago.
With the convenience of smartphone apps, commuters can now summon a ride with a few taps, significantly improving their daily transportation experience.
What started as a taxi-hailing service, which was originally aimed at reducing the risk of women riders by providing them a much safer and more transparent ride, has given birth to a myriad of services—from private cars to motorcycle taxis.
Plugging the gap
EVERY component of the public transport ecosystem serves a purpose—from jeepneys, UV Express, and public utility buses, to tricycles. Ride-hailing, according to Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Teofilo Guadiz III, is a critical part of the overall public transportation body.
“Each has its own function and specific market to serve. But all of them share a common responsibility, which is to bring our commuters safely to their destination,” Guadiz said.
He noted that ride-hailing services provide commuters with more options, while playing a role as a catch basin for other transport modes—especially when they are all clogged up during peak hours and holidays.
“The LTFRB looks at the ride-hailing industry as an essential component [of] the country’s public transportation system. We believe its presence is necessary to help augment the strong passenger demand using a digital platform technology application for easy
access of the passengers, especially during peak hours and more important, in peak seasons like the Yuletide season where more people will go out for their annual Christmas shopping and other activities,” Guadiz explained.
Asked about the impact of ride-hailing on traffic, Guadiz acknowledged that the industry does contribute to the volume of vehicles on the road. However, he stressed the positive aspects, such as the added convenience and flexibility for commuters.
Ride-hailing vehicles can navigate through traffic more efficiently, thanks to technology that allows them to choose optimal routes.
“Being the country’s regulatory body for the public transportation system, we just want to focus on the positive effects of the ride-hailing sector. But then again, it cannot be avoided that the commuting public will make comparisons of each denomination. Some may most likely see ride-hailing as a perfect fit for their needs, but not all commuters will see it that way,” he said.
Still, the LTFRB believes that ride-hailing is an essential component of the overall ecosystem, even as this has yet to reach its optimal capacity to truly meet passenger demand.
Grab the first mover
RIDE-HAILING started in the Philippines when Grab entered the Philippine market in 2013. Founded under the belief that providing a transparent ride will reduce the risk to commuters, while increasing accountability to drivers, will ultimately lead to an empowered passenger.
It was a first mover, so to speak—especially after it entered into an acquisition deal with its then-sole-competitor Uber—and has since diversified its operations from taxi hailing to enabling private cars to become transport network vehicle services (TNVS).
Grab has also developed different solutions that cater to the different needs of consumers.
For instance, it developed GrabShare to enable passengers to get cheaper rides by sharing their booked vehicle with other passengers.
Niche transport solutions also included GrabPet, for pet transport, GrabFamily, for passengers traveling with kids, and GrabCar Six Seater, for bigger groups. All of these, however, came to a complete halt when the pandemic happened.
And now that mobility is back and people are free to move around, Grab Philippines COO Ronald Roda said the local ride-hailing industry has seen “dramatic transformations” due to the pandemic.
“The Philippines’ ride-hailing landscape has undergone dramatic transformations, particularly in light of the pandemic. Prior to Covid-19, we were on an upward trajectory, with our GrabCar service witnessing a strong demand. However, the pandemic-induced lockdowns and travel limitations led to a transient decline in ride requests,” he said. “Thankfully, as we navigate the road to economic revival and recovery, the industry is making a strong comeback, albeit with evolved user preferences.”
Now, Roda explained, passenger preferences have evolved, emphasizing safety, reliability and efficiency more than ever before.
“Today’s passengers prioritize safety, reliability and efficiency more than ever before,” Roda noted. “Moreover, there’s a noticeable clamor for our services to expand in more cities beyond Metro Manila. This enthusiasm from other cities and communities underscores the growing acceptance and trust in the digital-first mobility solutions that Grab provides, affirming that Filipinos across various regions in the country are ready to embrace ride-hailing as a form of everyday transport.”
Still untapped potential
RODA said the ride-hailing sector in the Philippines holds immense potential for growth, and Grab is committed to harnessing that potential.
“At Grab, we’re committed to offering every passenger a blend of safety, reliability and convenience. While we’ve achieved substantial advancements in technology and diversified our services, our mission doesn’t stop there,” he said.
To further advance the industry and better serve passengers, Grab has a wish list from the government to facilitate its growth.
“We are proactively advocating for the expansion of TNVS slots and the opening of new cities for ride-hailing. These are crucial in meeting the growing demand for ride-hailing services, creating livelihood opportunities for our kababayans, and stimulating economic activities across various industries,” he said.
Grab believes that a balanced marketplace enhances reliability and offers cost-effective solutions that benefit passengers. The company is eager for sustained dialogue and collaboration with regulatory bodies to craft policies that strike a balance between consumer protection and the needs of their driver-partners.
Simplifying licensing processes and promoting innovation-centric policies are also at the forefront of Grab’s aspirations. These steps will not only improve the efficiency of the industry but also ensure that it remains adaptable to changing circumstances.
Asked about Grab’s plans for its mobility business in the Philippines, Roda said: “At Grab, our vision for the future of mobility in the Philippines revolves around creating an integrated and seamless transport solution for every Filipino.”
Key initiatives in this vision include expanding Grab’s fleet to accommodate the ever-increasing number of passengers seeking their services. This expansion aims to ensure consistent service quality, meeting the rising transportation needs of the commuting public.
Driver-partners
GRAB is also committed to playing an active role as the growth partner of its driver-partners.
“We ensure that they earn meaningful livelihood opportunities on our platform while creating growth pathways for them through skills development programs,” he said.
Expanding ride-hailing services to more cities and communities across the country is also on Grab’s growth agenda. It is actively consulting with regulatory bodies and local government units to identify regions where its innovative mobility solutions can create a positive impact for passengers, driver-partners and community stakeholders.
In essence, Roda explained, Grab’s objectives of geographic reach, fleet augmentation and partner success stand at the core of its endeavors.
Just two wheels
RIGHT before the pandemic hit the Philippines and made ghost towns out of all the roads, another form of ride-hailing service became very popular.
Motorcycle taxis—a glorified term of the colloquial word habal-habal—were weaving through Metro Manila’s congested arteries with the boys in light blue and white bringing commuters from point A to point B with just two wheels.
In provinces outside Metro Manila, habal-habal or informal motorcycle-for-hire services are popular and are well-positioned to meet the transport needs of commuters. However, they are considered “illegal” due to the lack of legislation that allows them to provide mobility services for people.
One digital platform tried to challenge this mindset by trying to put order into the industry.
Angkas was founded in 2016, after the then LTFRB management deemed GrabBike, the first two-wheel ride-hailing service in the country, illegal. Its founders, Angeline Tham, the former head of GrabBike in the Philippines, and George Royeca became instant celebrities and heroes by pushing the government to adapt to the demands of the time.
Tens of thousands of riders backed Angkas. Roughly 27,000 riders protested on Edsa one December Sunday in 2019 to pledge their support to the legalization of motorcycle taxis.
Together, Royeca and Tham championed in Congress the move to legalize motorcycle taxis as a form of public transportation. Their initiatives gave birth to the motorcycle taxi pilot study, essentially an evaluation of the service’s viability and safety.
Royeca, the CEO of Angkas, said the two-wheel ride-hailing sector has a significant role to play in bringing Filipinos to their destinations.
Similar to the four-wheel sector, the two-wheel ride-hailing landscape has seen “significant growth and transformation,” according to Royeca.
“What was once considered an informal and unregulated mode of transportation, primarily in the form of habal-habal, has evolved into a thriving and essential part of the country’s transportation ecosystem. With the introduction of companies like Angkas, the industry underwent a significant shift,” Royeca said.
He said before platforms like Angkas came into the scene, motorcycles-for-hire were largely unregulated, “which did not contribute positively to the economy.”
“However, Angkas changed this narrative by formalizing the industry. We provided employment opportunities, offering riders a chance to take pride in their work and contribute to society. Through collaboration with regulators and stakeholders, we have worked to establish industry standards, ensuring safety and professionalism among riders,” Royeca added.
The motorcycle taxi pilot program provided for the provisional operation of three transport network companies (TNCs): Angkas, JoyRide and Move IT. It has been almost four years since the program was launched and yet the government has yet to formally conclude it—either by enacting a law for, or banning motorcycles-for-hire.
Pass the law, imitate success in SEA
THE two-wheel ride-hailing industry in the Philippines is still in its early stages of development, but it holds immense potential, according to Move IT General Manager Wayne Jacinto.
“The two-wheel ride-hailing industry in the Philippines is still nascent,” said Jacinto. “We see that there is plenty of space for growth and improvement, which will be driven by three major factors: the ratification of the motorcycle taxi bill, growing the motorcycle taxi rider population, and platform innovations for two-wheel ride-hailing.”
Jacinto noted that other Southeast Asian countries, such as Vietnam and Indonesia, have well-established two-wheel ride-hailing industries, while the Philippines has been playing catch-up. It is still in the process of formalizing and regulating this sector.
“We should aspire to achieve the robustness of the two-wheel ride-hailing in countries like Vietnam and Indonesia, where the positive economic impact of the industry is very evident,” Jacinto added.
However, he commended the government regulations that focus on safety and welfare, emphasizing Move IT’s commitment to road safety and passenger satisfaction.
“We stand in firm alignment with regulatory measures focusing on the safety and welfare of both passengers and rider-partners,” Jacinto explained. “Road safety is an integral pillar of Move IT’s seven-point manifesto to our passengers, along with affordability, reliability and integrity of service.”
Jacinto expressed optimism about the industry’s potential to become a major livelihood driver in the Philippines once the government officially legalizes it and opens more slots for rider-partners.
“We are optimistic that once the government officially legalizes the industry and opens more slots for rider-partners, we will be able to unshackle the full potential of the motorcycle taxi as a mobility option,” Jacinto said.
Royeca echoed this sentiment, saying the passage of legislation will support the industry’s development and unlock its full potential. He believes that legislation regulating motorcycle taxis is essential for growth, safety, and providing commuters with reliable transportation options.
Regulating the industry can also contribute to safer road conditions and fair competition, he added.
Prioritize, focus on passengers
PRIMO Morillo, the convenor of The Passenger Forum, acknowledged the ride-hailing industry’s significance in addressing the challenges of public transportation in the Philippines, where limited options and traffic congestion persist.
“Due to the lack of public transport options, the ride-hailing industry is thriving in our country,” Morillo noted. “We still see mass public transportation as the most important solution in the transport crisis we are in. However, even if we are able to solve the current crisis, ride-hailing will still be popular and useful for Filipino commuters mainly as a last-mile option or for short door-to-door trips, and partly as an alternative to dilapidated taxi cabs and expensive vehicle rental.”
Morillo also provided insights into how the Philippines compares to other countries in terms of ride-hailing adoption, noting that the Philippines closely aligned with regional averages.
“Based on a 2021 study of Blackbox Research, 51 percent of Filipino respondents use ride-hailing services,” Morillo explained. “We are the closest to the 53 percent average among six countries covered by their research. Vietnam has the highest ridership at 69 percent, while Thailand registered the lowest at 38 percent.”
In assessing the current state of the four-wheel and two-wheel ride-hailing industry, Morillo highlighted the relative stability of the four-wheel sector compared to the evolving landscape of motorcycle taxis.
“The state of four-wheel is more stable than motorcycle taxis,” Morillo stated. “It was easier for our government to regulate four-wheel as we already have regulations for taxis before the advent of Uber and Grab. The formal motorcycle taxi industry in the Philippines is still dependent on a government study. Thus, there is an urgent need for the enactment of a motorcycle taxi law,” he said.
Morillo also provided valuable insights into regulations and policies that benefit passengers and areas where improvements are needed.
“We should focus more on customer experience, safety, and supply distribution,” Morillo emphasized. “The government should mandate accident insurance for passengers. Drivers of four-wheel and riders of two-wheel must be oriented well on social and gender sensitivity to ensure a better experience for passengers. Gross violations such as violence and sexual harassment must be decisively dealt with.”
Morillo also stressed the importance of understanding surge pricing and its role in balancing supply and demand while preventing price abuse. Additionally, he recommended distributing franchises to various urban centers to meet demand effectively.
Reshaping public transportation
THE ride-hailing industry has undeniably reshaped public transportation in the Philippines, offering commuters a convenient, safe and reliable mode of travel in a country where transportation challenges persist.
Guadiz acknowledged that there is a huge room for improvement in regulation and processes, and vowed to keep the LTFRB accountable to help the industry grow.
“Just like any industry or sector, constant development/upgrading/study is needed so that the ride-hailing industry is able to deliver optimum service to the riding public. Our mandate is to regularly oversee the industry’s performance and check for further improvements, and to see if they are following regulations laid out by the LTFRB, like if they are following the designated fare matrix, if they are overcharging, or doing other activities that may be detrimental to the public,” he said.
While challenges remain, such as the need for legislation to fully formalize the motorcycle taxi sector, there is a clear commitment from all sides to continue innovating and collaborating to enhance the passenger experience and further develop this vital component of the nation’s transportation ecosystem.
As Filipinos increasingly turn to ride-hailing services for their daily commutes, it’s evident that the industry is an idea whose time has come, bringing with it the promise of a more accessible and efficient future for all.
Image credits: Nonie Reyes