TNVS urges LTFRB to regulate commission rates of ride-hailing apps

Laban TNVS President Jun De Leon said the commission rates imposed by ride-hailing apps operated by Transport Network Companies (TNCs) currently stand at a minimum of 20 percent. INQUIRER.net STOCK IMAGE

MANILA, Philippines — A coalition of Transport Network Vehicle Service (TNVS) operators called on the Land Transportation Franchising and Regulatory Board (LTFRB) on Thursday to step in and regulate the commission rates charged by ride-hailing apps in the country.

According to Laban TNVS President Jun De Leon, the commission rates imposed by ride-hailing apps operated by Transport Network Companies (TNCs) currently stand at a minimum of 20 percent.

De Leon said that TNC drivers reel from this cut in their earnings, which is even more exacerbated by the high fuel costs that the drivers shoulder.

READ: LTFRB calls on ‘habal-habal’ operators to join pilot study for motorcycle taxis 

“For us, that’s already excessively high. Even with high gasoline prices, it’s still 20 percent. Regardless of the circumstances, it remains at 20 percent. Some drivers, just to make ends meet, spend 14 to 16 hours on the road,” De Leon told INQUIRER.net in an interview.

TNCs, as defined by the LTFRB, are firms that “provide pre-arranged transportation services for compensation using internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles.” This includes apps like Grab and motorcycle taxi services like Joyride, Angkas, and Move It.

“Allow me to give you a computation. Let’s say that a driver earned P5,000 in one day. Twenty percent of that is P1,000. He would also have to fill his gas tank with, let’s say, P1,000 worth of fuel. He would also shoulder maintenance costs of the vehicle; what would be left for him?” the Laban TNVS president asked.

The situation is even more challenging for TNC drivers who don’t own their vehicles and have to pay a “boundary” or quota to their operators, De Leon added.

De Leon’s group believes a reasonable commission rate should be around 10 to 12 percent, he said. He also suggested that the rates should be flexible, adjusting to factors such as fluctuations in fuel prices.

“It should be flexible. When gas prices are high, the [rates] must stoop to around 10 percent or less. But if the gas prices are low, maybe they can cut more from us, let’s say 12 percent,” he explained.

De Leon mentioned that Laban TNVS previously filed a petition with the LTFRB in 2022 to air the drivers’ perspective on this issue, but they are still awaiting a response from the agency.

Controlling the supply

Aside from slashing commission rates, Laban TNVS also called on the LTFRB to urge TNC firms to properly implement the number of drivers and riders using ride-hailing applications to ferry commuters.

De Leon explained that a proper “supply cap” is necessary so that the drivers’ profits would not suffer due to the ballooning supply of drivers.

“Competition isn’t necessarily bad,” he clarified, “but TNC firms need to carefully assess how many vehicles can effectively operate on the roads instead of simply allowing an influx of drivers.”

Citing data from his group, De Leon said that Grab-affiliated four-wheel drivers are capped at around 60,000 in Metro Manila, while motorcycle taxis are limited to approximately 37,000. However, he noted that the cap for motorcycle taxis is not effectively enforced, resulting in an excessive number of riders.

READ: Gov’t looking at motorcycle taxis for new jobs 

Grab has been advocating for the legalization of motorcycle taxis, a proposal that gained support from several lawmakers. This led the transportation department to initiate pilot testing for motorcycle taxi operations within Metro Manila and Metro Cebu in 2019.

The pilot study is still ongoing as of posting time.