Uber to LTFRB: ‘Simplify’ franchise application

Transport network company (TNC) Uber on Wednesday appealed to the Land Transportation Franchising and Regulatory Board (LTFRB) to “simplify” the process of applying for a franchise. (PNA photo)

MANILA, Aug. 3 — Transport network company (TNC) Uber on Wednesday appealed to the Land Transportation Franchising and Regulatory Board (LTFRB) to “simplify” the process of applying for a franchise to allow them to operate transport network vehicle services (TNVS).

In a Senate hearing, Uber Philippines Public Policy Head Yves Gonzales stressed that they were not against the process of application for franchises, however, she described the current process as “inefficient”.

“My proposal to the LTFRB: Let’s simplify the process for applying for TNVS franchises. We are not against applying for TNVS franchises, what we are against is an inefficient process because it has created the backlog that nobody is happy about,” Gonzales said.

In July 21 last year, the LTFRB stopped processing TNVS applicants. TNCs, however, continued to accept TNVS applications despite the order by the LTFRB stopping the processing of applications.

Gonzales said that he agreed that TNVS partners should be required to get franchises but said that the same should not be required of TNCs since “it is not engaging in the actual transport” of passengers.

On the other hand, Grab Public Affairs Head Leo Gonzales said that the company is open to both applications of franchises for both TNVS and TNCs.

LTFRB spokesperson Aileen Lizada acknowledged that the process to grant TNVS franchises took time, but noted that TNCs, also submitted their requirements late, sometimes incomplete.

Despite public criticism on the LTFRB interfering with TNVS operations, she stressed that the issuance of franchise is a delegated authority given to them by the Congress and that it was their job to regulate TNVS.

“We will not allow that they just accredit and we bow down to what they want. We are a regulating body, as long as we are here we will definitely regulate these terms and conditions. We cannot bend so far to accommodate you,” Lizada said.

Root of the problem

Lizada explained that the problem stemmed from when TNVS apply to operate under a TNC, their applications are activated immediately even without having secured a franchise.

“The issue here is we want TNCs to comply with their terms and conditions. If there were compliant in 2015, only those with franchises can book a ride. The problem is, we pitied TNVS because they were placed in an unfortunate situation that they didn’t know that they were supposed to get a franchise,” Lizada said.

Lizada pointed out that because this was a violation, the only penalty to be given was cancellation of franchise. However, the board opted not to cancel TNVS’ franchises since it would affect users who patronized them.

“When we saw that they had a violation, the only penalty is cancellation of accreditation, which we did not opt for because if we did that, we would be penalizing those patronizing Grab and Uber,” the LTFRB official said. The board, instead, fined both TNCs with PHP5 million each.

“We came up with an order telling them (Uber and Grab) not to add any more (TNVS) but they still did,” she added.

She also wanted Uber and Grab to determine if they operated under a ride-sharing or ride-hailing system noting that one operator that owned 40 to 60 cars could no longer count as ride-sharing.

“We need to determine the number of vehicles allowed per TNVS. We need to come up with direct number allocated to Grab and Uber,” she further said.

An LTFRB technical working group (TWG) will set a limit for the number of TNVS allowed to operate by September.

Senator Grace Poe, chair of the Senate Committee on Public Services, said that only 3,000 TNVS under Uber and Grab were operating with complete requirements. Each TNVS has around 20,000 pending applications.

Poe, meanwhile, vowed to craft a law that would define what a ride-sharing service is.

“If there will be regulations for ride-sharing, a franchise owner would only limit his vehicles to two or three. We should not allow ride-sharing to have a fleet of more than 10 vehicles because it defeats the purpose of ride-sharing.