Raising taxi fares is a necessary push that will force taxi operators and drivers to improve their services all over the country, according to the Land Transportation Franchising and Regulatory Board (LTFRB).
This was how the regulator justified its decision in approving the upward adjustments on taxi fares on Wednesday, while citing an upsurge of local and international pump prices as another factor for its decision.
After its publication on a newspaper of national circulation, the flag- down rate of taxis will be adjusted by P10 to P40, P13.50 per kilometer, and P2 per minute of travel time.
Hence, a passenger will have to pay P265 for a 10-kilometer ride with a travel time of 45 minutes.
The new fare matrix is approved for cities and provinces around the Philippines, except for the Cordillera Administrative Region, which received an approval of a P5 increase in flag-down rate to P35. Taxis in the said region were also authorized to charge P13.50 per km and P2 per minute of travel time.
The current fare matrix is as follows: a P40 provisional flag down rate, P3.50 per succeeding 300 meters and a P3.5 charge for waiting time.
The board decided to rule in favor of several consolidated petitions Prices of gasoline have increased over the course of the seven-year hiatus on permanent taxi-fare adjustments.
“What convinced the board in resolving in favor of petitioners’ prayer for fare increase is the fact that the last increase was granted way back in 2010, or seven years ago. From the past decisions and orders of this board relative to fare adjustment, the prices of fuel was the major concern,” the decision read.
According to the decision, average pump price from end-May to early- September 2017 was at P43.44 per liter, which increased by “more or less 30 percent” from gasoline prices a year before. Unleaded gasoline was around P29 to P37 per liter during the period under review.
“Inflation and cost of living are equally important factors. The value of money seven years ago are way different to date,” it added.
The regulator also noted the increased competition that resulted from the entrance of transportation network companies, which have put a dent on the revenues of taxi companies due to decreases in dispatched units.
“Although the impact thereof was slightly and temporarily deterred by the steady performance of our economy, and the comprehensive plans and programs of the government to improve the traffic situation, and the coordinated effort of the key agencies of the government to alleviate the public land transportation sector, the need to adjust fare rates for taxi services is necessary for them to level up their service standards at part with new transportation modes,” the decision read.
Taxi operators have been competing for passengers against the likes of ride-hailing app Grab and Uber for quite a few years now. Tech-based transport operators price their fares based on what they call as “dynamic pricing”, which bases charges from demand, supply and traffic data.
The agency noted that for taxi operators with phased-out model units or those that will file substitution of units, the new unit must comply with the Public Utility Vehicle Modernization Program of the government, and the Omnibus Guidelines on Planning and Identification of Public Road Transportation Services and Franchise Issuance.
Under the modernization program for the public-transportation sector, operators are required to set up, among others, dash cameras, tracking devices, closed-circuit televion, and to provide free Wi-fi to customers.
Before taxi drivers could charge their customers with the new fare matrix, their units must first undergo recalibration. They also have to pay the agency a filing fee of P510, and a legal research fee of P10 per case number.