With Grab becoming the dominant player in the ride-hailing industry, there is a pressing need to prevent a “virtual monopoly” and encourage new players to create a healthy competition among transportation network companies (TNCs).
That’s why lawmakers believe it is high time, more than ever, to pass measures that promote competition and provide the necessary regulation for all transportation network vehicle services (TNVS).
Recently, the country’s No. 1 TNC has been hounded by allegations of hidden and high charges following the shutdown of its rival, Uber Philippines. This came after Grab decided to merge its operations with Uber.
Party-list Rep. Jericho B. Nograles of PBA said the growing ride-sharing industry should be regulated for the safety of the riding public.
“Right now, all TNVS players are being regulated by the LTFRB [Land Transportation Franchising and Regulatory Board] based on nonspecific laws. Without specific law, regulation has certain limits. That’s why we need to pass a specific law to define and protect the rights of all parties involved,” Nograles said.
For his part, Party-list Rep. Rodel M. Batocabe of Ako Bicol said regulating these TNVS should require a congressional franchise. “I have already urged them in a previous hearing to get a franchise [before] the controversy involving Uber and Grab erupted,” he said.
“But until now they have not initiated any effort to file. As it is, we cannot file for a franchise without cooperation. In the meantime, our bill regulating the TNVS has become “Mona Lisa” in the House Committee on Transportation. If there is franchise requirement for them, regulators can monitor them properly, and grey areas in their operation will be properly defined and delineated,” Batocabe added.
“Mona Lisa” refers to a particular line in this Nat King Cole song that goes: “Many dreams have been brought to your doorstep / They just lie there and they die there.”
Rep. Edgar Mary S. Sarmiento of the First District of Samar also raised the need for Congress to finally come up with a law that
would provide for a special regulatory framework for TNCs and become part of the mainstream public-transport system.
Sarmiento said the Department of Transportation (DOTr) and the LTFRB are only carrying out their mandate in launching a crackdown against TNVS drivers who failed to secure a franchise, but by doing so, they might be denying the public a more secure and more comfortable mode of alternative public transport.
Citing a 2015 study of Japan International Cooperation Agency, LTFRB Chairman Atty. Martin B. Delgra III told Congress that there are about 21.5 million daily ridership in Metro Manila, 70 percent of that are taking public transportation of all types—from rail, bus, UV Express and public-utility jeepneys.
Insofar as the numbers that the LTFRB got from TNVS, Delgra said they are looking at a daily riders of 115,000 each or 300,000 rides per day. “You relate that to the 70 percent of 21.5 million daily ridership as of 2015, which will only constitute 1.5 or 1.6 percent,” Delgra said.
Earlier, Bryan Cu of Grab Philippines told lawmakers that Grab serves about 152,000 people daily. He said 180,000 are trying to get a ride daily, called “booking.”
Meanwhile, before its closure, Uber Philippines was serving 1 million to 1.2 million riders every month. However, Party-list Rep. Ariel B. Casilao of Anakpawis said these TNVS do not need another bureaucratic process that will add to their situation.
“We will oppose such move. Drivers and small operators do not need another bureaucratic process that will add to their already burdened situation,” he said. Instead, Casilao said the government should simplify the process for these ride-sharing vehicles.
“Simplify the process, institute a genuine pro-people, pro-drivers, pro-small operators public mass-transportation program. Aside from the process, a legislative franchise can be a political tool in repressing further organized criticism among the ranks of progressive organizations of small drivers and operators that will consistently expose and oppose anti-drivers, anti-small operators and anti-people programs of the administration,” Casilao added.
Refund
Regulating TNVS in the country has been a hot topic after the riding public reported Grab’s higher fares since it became the dominant player and following the revelation that Grab has been “illegally charging” its customers P2 per minute of travel time. Nograles said Grab cannot use their drivers as a shield in their obligation to return the illegally collected fares and should charge this refund from their own pocket.
Nograles said the decision to collect the illegal P2 per minute extra fee was made by the Grab management and not by its drivers.
He estimates that Grab owes their riders some P3.24 billion in illegally collected fares after its admission that it has been charging P2 per minute on travel time from its riders since June 2017.
“I am appealing to Grab and the LTFRB to refund the estimated P3.2 billion in illegally collected fares. Since the drivers are unaware of this malicious act, Grab should charge this refund from their own pocket,” Nograles said.
Nograles also dismissed Grab’s insistence that TNVS fares can be set by TNCs like Grab because this has been overruled by LTFRB when it issued specific fare rates, including it calculations.
“As cited by Grab, per DOTr 2015-11, the TNVS fares can be set by the TNCs subject to oversight of the LTFRB. That oversight was exercised by the LTFRB through the approved rates of December 2016, which Grab faithfully followed until they unilaterally added P2 per minute fare in June 2017 without the consent of the LTFRB,” Nograles said.
“Furthermore, in 1994, specifically the case of KMULC vs. Garcia and LTFRB, the Supreme Court ruled that the LTFRB cannot delegate its power to determine rates, and therefore, Grab’s actions are deceitful and malicious,” he added.
Meanwhile, Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur is pressing the LTFRB to crack the whip on the operator of the ride-hailing service Grab amid mounting complaints from customers about exorbitant fares and the nasty practice of the company’s driver-partners of canceling rides or refusing bookings by passengers.
With barely a week after Grab emerged as the sole ride-hailing service in the country, Villafuerte said its virtual monopoly quickly reared its ugly head in the form of these anti-competition practices of abrupt ride cancellations and prohibitive fare price surges.
“The LTFRB, for sure, has heard about the mounting complaints of Grab’s customers ever since it completely took over the ride-hailing service in the country after Uber ceased its operations here. We cannot allow Grab to continue allowing its abusive driver-partners to operate, or to overcharge passengers just because we are left with no choice but to tolerate Grab’s virtual monopoly that has led to a fast-deteriorating quality of service,” Villafuerte said.
He added he was also informed by Grab customers that the company had taken out its link in its app that allow them to contact Grab’s support via e-mail to complain about drivers who abruptly cancel bookings.
“I was told that these drivers cancel bookings without even the courtesy of informing them about the cancellation. Many of them have complained that they were made to wait for a long time by drivers, only to have their rides cancelled. This is highly unprofessional behavior that Grab should not tolerate,” Villafuerte said.
The lawmaker also renewed his call for the LTFRB to speed up the processing of the applications of three other transport network operators to encourage competition and force Grab to improve its service.
According to reports, four new TNCs—Lag Go, Owto, Hype and Pira—have applied for accreditation before the LTFRB. So far, only the accreditation of Hype Transport Systems has been approved by the LTFRB. Another potential TNC, HirNa, is also exploring the possibility of joining the ride-hailing industry.
“Up to now, the LTFRB has not yet acted on the rest of the applications. Its practice of taking its own sweet time in accomplishing what should have been urgent tasks is another reason why the power and authority over ride-hailing services should be removed from this office and transferred to its mother agency, the DOTr,” Villafuerte said.
The lawmaker said revamping the existing regulations for TNVS attached to TNCs like Grab and transferring control over these providers from LTFRB to the DOTr would make the government more responsive to the needs of the riding public.
Villafuerte said the LTFRB has been coming up with ill-conceived guidelines for TNVS because of its misguided interpretation on the role of these service providers.
For one, the LTFRB treats TNVS as common carriers like taxicabs and passenger buses when the nature of the service they provide clearly shows that they are not, Villafuerte said.
To provide a permanent solution to this issue, he said Congress should swiftly tackle and approve his proposal of coming up with a separate regulatory framework for TNVS and TNCs like Grab.
Villafuerte, in filing House Bill (HB) 6467, said it is the DOTr, and not the LTFRB, that should have authority over TNCs and TNVS, because the vehicles used in these point-to-point transport services are “private carriers” and not common or public carriers that fall under LTFRB supervision.
Pending bills
Currently, the House Committee on Transportation’s technical working group is harmonizing four bills and four resolutions
seeking to regulate the operation of TNCs and TNVS in the country for public safety and welfare, reliability and convenience.
The TWG is consolidating HBs 4085, 4669, 4891, 6009 and House Resolutions 403, 573, 1140 and 1151 authored by Reps. Joseph Sto. Niño Bernos (Lone District, Abra), Winnie Castelo (2nd District, Quezon City), Batocabe, Nograles, Benjamin Agarao, Jr. (Fourth District, Laguna), Jose Panganiban Jr. (Party-list, ANAC- IP), Michelle Antonio (Party-list, Agbiag) and Sarmiento, respectively.
Rep. Cesar V. Sarmiento of the Lone District of Catanduanes, transportation committee chairman and head of the TWG, said the pending bills simply seek to legalize or formalize the existing situation by allowing the operation of TNCs and TNVS subject to the regulation of the LTFRB.
“Despite the benefits the TNCs offer, the government still needs to regulate them to ensure the roadworthiness of the vehicles, the qualifications of their drivers, the reasonability of their prices, the protection of passengers and the payment of fees and taxes. All of these must be ensured in the context of solving the traffic crisis and considering the interest of all Filipino commuters, not just the TNCs and TNVS users,” Sarmiento said.
For his part, Castelo said the regulation of TNCs is necessary to prevent unfair or predatory practices by unscrupulous transportation network service providers and to protect public safety and welfare while recognizing that a strong, viable, private sector transport industry has a role in efforts to improve transportation mobility.
Nograles said his bill seeks to recognize TNCs and prescribe requirements, guidelines and standards for their operation. “The regulation of TNCs is intended to ensure the promotion of safety and welfare of the commuting public, and at the same time maximize innovations in technology and the advantages that TNCs can offer in helping alleviate the suffering of commuters and promote the country’s transportation industry,” said Nograles.
Panganiban said that, with the anarchy in the transportation industry, Congress has to exercise its franchise-giving powers. “Considering Department Order 2015-11 that created TNC and TNVS, which specifically provided that while TNVS applicants are being accredited by the TNC, the LTFRB is further directed to accede to the TNCs while waiting for guidance from the legislature regulation of the new industry and promulgation of guidelines for their accreditation,” Panganiban said.
Batocabe, whose HB 4891 is also authored by Reps. Alfredo Garbin Jr. and Christopher Co, said the bill’s intention is to ensure that regulation is not a hindrance but continues to be the safety net that the public can rely on for their protection in the interest of transportation development and public service.
“The bill defines the nature of TNCs and TNVS. They must be responsible for the service they provide and be held liable for any breach on the contract of carriage. The bill also provides standards in the accreditation of transportation- network service providers and ensures the qualification of their drivers. It also requires them to issue electronic receipts for passenger safety and taxation purposes,” Batocabe said.