Rose Marie M. King-Dominguez
Partner
E: rmmking@syciplaw.com
SyCip Salazar Hernandez & Gatmaitan
SyCipLaw Center, 105 Paseo de Roxas, Makati City, Philippines
Tel: (632) 982 3500, 982 3600, 982 3700
Fax: (632) 817 3145, 817 3896
www.syciplaw.com
Uber has been the most recent poster child of disruptive innovation; its business model refuses to fit typical parameters by which most countries regulate public transport.
Like other jurisdictions, the Philippines characterize persons offering transportation services to the public as public utilities. Not only do these providers have to obtain a franchise and comply with a slew of regulations, they need to be at least 60% Filipino-owned.
Back to topIt Ain’t Over for Uber
Enter Uber (sometime in 2013) whose presence on Manila’s streets quickly gained popularity among normally taxi-riding city residents. But it also gained the ire of franchise holders that saw an unregulated Uber as having an unfair advantage.
Back to topLegalizing Uber
However, a strong Uber lobby has ultimately resulted in the world’s first set of rules expressly allowing and regulating “transportation network companies” or TNCs.
In May of this year, the Philippine Department of Transportation and Communication issued Department Order No. 2015-11, which expanded the recognized transport categories to include a TNC service. The Land Transportation and Franchising Regulatory Board followed suit, with a series of circulars.
One of the LTFRB circulars defines a TNC as an organization, whether a corporation, partnership, or sole proprietorship that provides prearranged transport services for compensation using an internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles.
Back to topCPC and Accreditation Requirements
The new rules require the TNC to obtain a certificate of public convenience from the LTFRB to provide transportation network vehicle services (TNVS) vehicles.
Undoubtedly to address the concerns of franchised operators, TNVS drivers must only carry passengers who pre-arrange rides through TNC-provided online-enabled application and not through phone call or booking service.
Back to topSecurity Check
The terms and conditions of TNVS accreditation require the TNC to accredit only drivers with a professional license, and who are registered with the LTFRB as TNVS drivers. TNC’s are required to implement a zero tolerance drug and alcohol policy.
The LTFRB circulars appear to limit liability of TNCs to compliance with terms and conditions specifically applicable to TNCs, but insulates it from actions of drivers that are characterized as independent contractors.
Recently, Congress initiated a probe into the company’s operations. Regardless of how Uber pans out, regulators may want to follow the LTFRB’s lead and be open to reviewing, and even breaking the mold of rules that more and more have little to do with how people do things or live their lives.
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