LTFRB Chairman explains need to limit Grab, Uber cars

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Decision to limit and make companies share supply pool underwent consultation and study

LTFRB Chairman Atty. Martin Delgra defended the regulatory body's decision to limit the number of Transport Network Vehicles (TNV) as part of Memorandum Circular 2018-03 issued last Thursday, January 18.

The decision to limit Grab, Uber units and introduce new TNV common supply base was done to give the LTFRB a more focused regulatory function on such service.

At the height of the regulatory board's crackdown on unregistered TNVs last year, it was revealed that both Grab and Uber had over 100,000 driver "partners" combined. Uber revealed it had 66,000 "partner drivers", while Grab had 52,000 during a committee hearing on transport at the House of Representatives.

Services of Grab and Uber have been subject to much debate and lawsuits across the globe due to its unique and modern approach to the public transport industry. Legacy transport providers such as taxi companies and drivers have protested against their high tech operations, while some drivers have went on to physically assault Uber drivers and their vehicles in some countries.

The Philippines made a landmark approach towards the modern transport service in 2015 by being the first country to accredit the services and their "partners" as Transport Network Companies (TNC) and Transport Network Vehicles (TNV), respectively.

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Below is the statement of Chairman Delgra in full:

"The MC setting a limit on the number of TNVs was arrived after judicious and careful deliberation by the Board following numerous TWG meetings with TNCs during which relevant data were discussed and subsequent informal consultations with TNCs.

The Policy on a common supply base for TNVs was envisioned to create a distinct denomination for this type of public transport service and not defined by the individual business models of the TNCs, thus giving the Board a more focused regulatory function on such service. In fact, one TNC was of the position that the TNVs and drivers database it has developed cannot be shared with other TNCs nor disclosed to the public; such a position is contrary to existing regulatory policy of the Board. In fact, anyone can verify with the Board on details of TNVs which have valid franchises.

More, the idea of a common supply base came from the current practice of TNVs operators and/or drivers who are accredited by more than one TNC and thus became what they call “dual citizens”. As it is now, the current TNCs, and several other TNCs who have expressed interest to the Board to provide this type of service, are now free to get the supply from the common supply base for their respective network unbridled by any preference over any TNC.

On the part of the TNVs operators, they are to file their application for CPCs on their own as TNVS and after getting the required CPCs can now apply for accreditation with any TNC or conversely, TNCs duly accredited by the Board may take initiative to accredit the needed number of TNVs in their system.

The ceiling of 45,000 units was determined from the relevant data given by the leading TNCs taking into consideration churning rate, percentage of full-time and part-time TNVs, peak and off-peak hours and average daily bookings, among others. Mindful that the demand varies from time to time, the Board will review the policy 3 months after it become effective. 

As to how many drivers may be affected by this MC, the TNCs, Grab and Uber, would be in a best position to answer that vis-a-vis how many they have accredited so far. Please note that the number of drivers is differentiated from the number of TNVs, the latter being required to get a franchise from the Board. It is not uncommon that one TNVs, especially those under utilized, may have more than one driver."

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The regulatory board has been under fire recently for another issuance, Memorandum Circular (MC) 2017-032 issued in November 29, 2017 which stated that “Hatchbacks and other four (4) door compact or smaller sedan with Piston Displacement not less than 1200cc (rated) may be allowed as proposed unit or as substitute unit provided that the unit is compliant with the minimum dimension, safety and comfort features prescribed under MC No. 2015-004.”

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