The Uber/Grab conundrum: 8 Qs remain unanswered

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Grab Philippine country head Brian Cu answers queries of legislators on the intricacies of its ride-sharing services. PNA photo by Avito C. Dalan

Grabbing an Uber-safe and convenient ride using a smartphone app has never been easier (pun intended).

However, the utmost simplicity of this system has given rise to a complex public transport problem that has reached the hallowed halls of the Senate.

What should have been a magical solution to commuters’ woes has turned into an out-and-out legal and administrative tussle between transport network companies (or TNCs, primarily the most popular ones being Uber and Grab) and their faithful patrons on one side, and the Land Transportation Franchising and Regulatory Board and taxi companies on the other.

The fray has spilled on to social media, with the louder voices obviously belonging to pro-TNCs (or anti-taxis) lambasting the LTFRB and regular taxi services.

Enter now the Senate, in particular public services committee chair Senator Grace Poe, who conducted an Aug. 3 hearing on this rapidly escalating issue.

That day-long hearing, where all concerned parties were present to air their side, ended with eight crucial questions that needed to be answered before any meaningful solution—or compromise—can be reached.

Q 1: What is the legal framework that defines transport network vehicle services (TNVS)?

Poe said she agreed with LTFRB’s concerns, stressing that the “identity” of TNCs are still unclear: “Are you ride-sharing? How many vehicles can an owner register?”

She explained, “A lack of legal framework that would govern the operations of TNVS still puts them in limbo. We should not allow that.”

Q 2: Do TNVS really worsen traffic in Metro Manila, in particular, Edsa?

Poe computed that for traffic along Edsa to move, there should only be around 5,600 vehicles there at any given time.

There are up to 8,000 active Grab users per hour during peak hours (no data from Uber was available, but the Senator estimated roughly the same number as Grab).

However, not all TNVS necessarily ply Edsa simultaneously.

Q 3: How is surge pricing really determined?

Poe observed that “there were instances when ‘surge pricing’ rose to very high levels, such that the LTFRB had to step in and place a cap on the surges.

“We need to know the factors that affect the dynamic pricing of TNCs.

LTFRB Board member Atty. Aileen Lizada faces legislators and expounds on the issues involving ride-sharing services. PNA photo by Avito C. Dalan

“I know that the software used is proprietary. The TNCs do not have to go into detail, but at least explain why it is sometimes more expensive during peak hours,” she said.

Q 4: Can the LTFRB place a cap on the number of TNVS units plying the streets?

“Since the LTFRB has the authority to limit the number of PUVs plying the roads, should there be a similar cap on TNVS vehicles?” Poe asked.

Though TNVS have been freely operating in many urban settings abroad, Poe also observed that “not all countries or cities have approved TNVS. For example, South Korea has suspended operations for TNVS. Germany, Netherlands, and Belgium have imposed a partial ban, and some cities in the United States and India have imposed a total ban on TNVS.”

Q 5: Do we need to create a new law for TNVS?

Poe cited Section 7 (a) of RA 4136, or the Land Transportation and Traffic Code: Private motor vehicles “shall not be used for hire under any circumstance. Given this, it is obvious that the TNVS do not fall squarely into our laws on common carriers.”

This is why, she explained, new laws responsive to the characteristics of TNVS must be crafted.

And for that to happen, it all goes back to Question 1. “What is the primary definition and objective of TNVS—is it to provide ride-sharing or ride-hailing? Those are two different things,” said Poe.

Q 6: Is there an effective complaint mechanism for taxis?

Poe observed, “Unlike taxis, Uber and Grab have a complaint mechanism and allow passengers to rate their experience.”

This rating system goes straight to the TNC administrators, where complaints are immediately acted upon.

“LTFRB should also require taxis to update their fleet and teach their drivers to be more courteous. Taxi operators should also be made to respond immediately to complaints thrown against their drivers,” the Senator stressed.

Q 7: Who’s really to blame when TNCs continued to accept applicants even when LTFRB ordered them not to?

On July 21, 2016, LTFRB suspended the processing of TNVS applicants, resulting in numerous TNVS operators or drivers unable to secure a provisional authority (PA) or a certificate of public convenience (CPC) to operate.

“Why did the TNCs continue to accept TNVS applications despite the July 21, 2016 order by the LTFRB?,” the Senator asked.

On the other hand, Poe also laid blame on the regulatory board, pointing to its indecision and delayed processing.

Q 8: In the event of damage to property or injury or death to persons, to what extent are TNCs liable?

To this question, Poe does not offer a direct answer, though she did cite a Court of Appeals ruling.

“The Court of Appeals in De Guzman vs. Court of Appeals ruled, ‘a certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. To exempt private respondent from the liabilities of common carrier because he has not secured the necessary certificate of public convenience (CPC) would be offensive to sound public policy.’”

To this effect, Poe reiterated that even if TNVS units are still operating without the PAs and CPCs, this does not exempt them from “all the liabilities and responsibilities” of a common carrier.



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