LTFRB:Limit on TNVS units to ensure regulation of ridesharing industry

The LTRFRB, in a memorandum issued late last week, imposed a common base of 45, 700 TNVS units (PNA photo)

MANILA — The Land Transportation Franchising and Regulatory Board (LTFRB) said its decision to set a common supply base for transportation network vehicle services (TNVS) units is aimed at creating a distinct denomination for the transport service that will facilitate regulation of the ridesharing industry.

The initiative was derived out of the current practice of TNVS drivers who are accredited by more than one transportation network company (TNC).

“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,” LTFRB Chairman Martin Delgra III said in a statement over the weekend.

“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,” he added.

The LTFRB, in a memorandum issued late last week, imposed a common base of 45,700 TNVS units nationwide which were broken down as follows:

Metro Manila – 45,000 TNVS units

Metro Cebu – 500 TNVS units

Pampanga – 200 TNVS units

The cap on TNVS units was determined from 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.

The Board will review the policy three months after it becomes effective as demand varies from time to time.

The common base will enable TNVS drivers to register under ridesharing companies that are accredited by the Board.

All valid and existing certificates of public convenience (CPCs) to operate TNVS and those with pending applications are included in the common supply base.

The validity of existing CPCs to operate TNVS shall remain effective subject to the new terms and conditions as may be prescribed by the Board.

Accredited TNCs should accept and process for accreditation only valid CPC holders.

For its part, Grab said LTFRB’s move would adversely affect the number of TNVS units that they are operating amid increasing demand from their passengers.

The ridesharing firm needs around 70,000-80,000 units in order to replenish their supply of transport services to the commuters.

“What this supply cap does is take away the power of the part-timer who adds supply during critical supply. 45k DAILY ACTIVE DRIVERS in Manila make sense, but we need around 70k-80k total franchise holders since not all of them will be driving every day, despite any minimum active hours required,” Grab Philippines Country Head Brian Cu said in a social media post.

The new guidelines will take effect on Feb. 3, 2018.

There are around 125,000 TNVS units in Metro Manila, according to the LTFRB.