DOTC guidelines on ride-sharing app out

The Department of Transportation and Communications (DOTC) released on Wednesday a department order paving the way for the legal operations of smartphone ride-sharing applications in the Philippines—the first move by a country to create a framework to accommodate technology transit services.

The development finally gives legitimacy to global platforms like Uber, GrabCar, Easy Taxi and Tripda, which are present in the Philippines but would likely hurt the traditional taxi cab operators, with one organization saying they were mulling a lawsuit against the DOTC.

All the apps had been operating in the Philippines without the guidelines as the government implemented a general policy of holding off on arrests until the rules were finalized.

The department order outlines the new classifications, including that for so-called Transportation Network Vehicle Service (TNVS) that the smartphone rider-sharing applications will fall under. He said this will allow Transportation Network Companies (TNC) “to exist within our regulatory framework.”

With the department order’s release, regulator Land Transportation Franchising and Regulatory Board can begin working to finalize its memorandum circular, which would outline specific regulations and requirements for the platforms and their drivers.

“This is to merely offer better services to compel them [traditional taxi cabs] to modernize and compete,” Transportation Secretary Joseph Abaya said in a press conference this week. “People will get to choose whether they want to use the older taxis or TNVS [cars].”

“We shouldn’t look at this as added competition or to destroy the [traditional] taxi industry,” Abaya added.

Jesus “Bong” Suntay, president of the Philippine National Taxi Operators Association, disagreed with the government’s view and said this would ultimately hurt their business.

Among the options, he said, would be to sue the DOTC and LTFRB as the entities did not take into consideration the impact of letting TNCs operate.

“We are now relegated to a second choice,” Suntay said, noting unfair advantages of these transit application platforms since they have not been operating their own cars. He said services like Uber, which has been providing a platform for a passenger to link up with a private car driver, have been benefiting from fares not regulated by government.

“We are a business entity, we have a big investment in our companies,” Suntay said, adding that they have asked the government to mitigate the impact on their business like limiting the types of cars TNCs can register to larger and more premium vehicle models.

The DOTC is also imposing certain standards for vehicle eligibility, such as the requirement of global positioning system (GPS) tracking and navigation devices for convenient and safer services. Only sedans, Asian Utility Vehicles (AUV), Sports Utility Vehicles (SUV), vans or other similar vehicles will be allowed.

“A maximum age limit of seven years will be enforced,” the DOTC said.

Operators will be required to obtain a Certificate of Public Convenience (CPC) for every vehicle to ensure accountability, the DOTC said. To promote passenger safety, drivers must be screened and accredited by the TNCs and registered with the LTFRB, it added.

Representatives of ridesharing applications welcomed the news even as some acknowledged that several details need to be ironed out with LTFRB. Chief among these is on the regulation of fares, which some ridesharing applications currently dictate.

Still, they underscored the current collaborative environment in the Philippines.

“Today, the Philippines has officially become the first country to create a national dedicated framework for ridesharing,” David Plouffe, senior vice president of policy and strategy at Uber, said in an emailed statement.

“This first-of-its-kind order is a shining example of how collaboration between government and industry can advance urban mobility, create new economic opportunity and put rider safety first,” he added.

Representatives likewise said they were ready to compete.

“We all agree that competition is healthy— it comes down to who will execute the best,” Natasha Bautista, deputy director general manager at Grabcar, said during the briefing.