Online taxis need franchise, say lawmakers

The House of Representatives is urging the Department of Transportation and Communications (DOTC) to take Uber, EasyCar and GrabCar off the road because it considered online taxis nothing but “colorum,” or no-franchise vehicles.

The House committee on transportation, through its technical working group, said the biggest concern about the operations of these transportation network vehicles services (TNVS) and transportation network companies (TNCs) was their lack of liability in case of traffic accidents and their nonpayment of taxes.

The committee also admonished the DOTC and the Land Transportation Franchising and Regulatory Board (LTFRB) for moving to expand the operations of the online services while suspending the issuance of taxi franchises to serve rising public demand.

The recommendation came just two weeks after LTFRB Chair Winston Ginez issued four memorandum circulars that would govern the operation of online-enabled transportation service and legitimize their operations through the grant of franchise.

The ride-hailing service through mobile phones has become a popular alternative for commuters who could afford the extra fare in exchange for a more reliable, convenient and faster transport service.

But like in other countries, Uber has met stiff resistance in the Philippines, especially from taxi operators who decry the lax rules imposed on TNCs and TNVS.

Just like taxis

In some cases, Uber is being run like an ordinary taxi business with some operators owning fleets of cars.

Batangas Rep. Raneo Abu said Uber, EasyCar, GrabCar and other online transportation services should comply with government requirements like the franchise requirement for taxis.

Since Uber-like services operate without any franchise, Abu said, these are considered colorum vehicles that should be immediately apprehended. Abu has questioned why the Philippine National Police allows Uber-like operations to continue despite being patently illegal.

Nueva Ecija Rep. Estrellita B. Suansing said the LTFRB memos were vague on the responsibilities and liabilities of TNCs and TNVS owners.

“Unlike the regulation currently imposed on regular taxis, the MCs are silent on the fines and penalties for offenses committed by erring drivers,” she said.

Suansing said owners of Uber should appear before the committee to explain their business model.

“Why are they being allowed to operate when they are only listed as system developers? They are not certified transport services,” she said.

SEC position

Based on testimony by Securities and Exchange Commission (SEC) Corporate and Partnership Registration Division Assistant Director Mary Anne Morales-Lagura, Uber Philippines Inc. was registered as a mere system developer.

She also questioned why the DOTC and the LTFRB were prioritizing the expansion of Uber-type services over the taxi industry where new franchise applications had been placed under moratorium.

“TNCs should utilize franchised taxis instead of privately owned vehicles,” she said.

Suansing said the TNCs should be made to pay taxes not only for arranging the trip but also for the entire cost of fare collected from passengers.

She said the Bureau of Internal Revenue should come up with a formula to tax this new public transport service model.

Surigao del Sur Rep. Philip A. Pichay said Uber and other TNCs should submit to the committee copies of their income tax returns and audited financial statements.

In their testimony to the committee, acting LTFRB Director Robert Peig, Uber representative Donemark Calimon and Bryan Cu of GrabCar agreed that drivers of TNCs and TNVS should be held liable for offenses and violations committed during their service, they should be made to pay taxes, and their owners and drivers should be registered.