Professional Documents
Culture Documents
Uber Grab Pros
Uber Grab Pros
1. UBER / GRAB are TNCs and Uber/Grab partners and/or drivers are
TNVS
2. Uber / grab considered public utility
3. For rate-fixing — The Court held that Advocacy of liberalized franchising and
regulatory process is tantamount to an abdication by the government of its
inherent right to exercise police power, that is, the right of government to regulate
public utilities for protection of the public and the utilities themselves. (KMU case)
4. LTFRRB chairman stated that the government will always push for
anything that modernizes transportation systems,” but added that
government regulation must happen when public services are
concerned.
5. Exercise of police power
Background
In Philippine jurisdiction, the Department of Transportation (DOTr), formerly
Department of Transportation and Communication (DOTC), made a new classification of
transport service system known as Transportation Network Vehicle Service (TNVS) as per
the Department Order No. 2015-011. This refers to the Uber/Grab
“partners”/drivers/vehicle. Other classifications are Bus Rapid Transit, Airport Bus and
Taxis— as a response to the increasing demand for mobility brought by the rapid growth
of urbanization in cities and municipalities and address the large demand for transport
services in expeditious and responsive ways as a way of modernizing and improving
transport services currently being offered to the Filipino commuting public. This
classification will allow app-based services offered by Transportation Network
Companies (TNC) to exist within the government’s regulatory framework.
Also under the DO, Transport Network Company (TNC) was defined as an
“organization whether a corporation, partnership or sole proprietor, that
provides pre-arranged transportation services for compensation using
internet-based technology application or digital platform technology to
connect passengers with drivers using their personal vehicles.”
The DO set the standard classifications for public transport conveyance to be used as basis
for the issuance of Certificates of Public Convenience for public utility vehicles.
The two most known TNC in the country are Uber and Grab are considered TNCs. TNC
provides the platform for the transportation service to be pre-arranged, the
transportation service itself is rendered by the TNVS.
E.O 202 OF 1987 CREATING THE LAND TRANSPORTATION FRANCHISING
AND REGULATORY BOARD
Sec. 5. Powers and Functions of the Land Transportation Franchising and
Regulatory Board. The Board shall have the following powers and functions:
e. To punish for contempt of the Board, both direct and indirect, in accordance with
the pertinent provisions of, and the penalties prescribed by, the Rules of Court;
f. To issue subpoena and subpoena duces tecum and summon witnesses to appear in
any proceedings of the Board, to administer oaths and affirmations;
i. To promulgate rules and regulations governing proceedings before the Board and
the Regional Franchising and Regulatory Office: Provided, That except with respect to
paragraphs d, e, f and g hereof, the rules of procedure and evidence prevailing in the
courts of laws should not be controlling and it is the spirit and intention of said rules that
the Board and the Regional Franchising and Regulatory Offices shall use every and all
reasonable means to ascertain facts in its case speedily and objectively and without regard
to technicalities of law and procedures, all in the interest of due process;
j. To fix, impose and collect, and periodically review and adjust, reasonable fees and
other related charges for services rendered;
m. To perform such other functions and duties as may be provided by law, or as may
be necessary, or proper or incidental to the purposes and objectives of this Executive
Order.
Vehicle Type: Sedan, Asian Utility Vehicle, Sports Utility Vehicle, Van, Sport Utility
Vehicle or other similar vehicles
Seating Capacity: Not more than 7 passengers, excluding the driver
Ventilation: Airconditioned
Fare: As set by TNC, subject to oversight from the LTFRB in cases of abnormal disruptions
of the market, such as but not limited to any change in the market, whether actual or
imminently threatened, resulting from stress of weather, convulsion of nature, failure or
shortage of electric power or other source of energy, strike, civil disorder, war, military
action, national or local emergency, or other cause of an abnormal disruption of the
market which results in the declaration of a state of emergency by the President.
Operation Conditions:
e) Vehicle must not be more than 3 years old from date of manufacture;
h) Driver must always have an on-line enabled digital device during a pre-arranged ride;
i) Driver must only carry passengers who pre-arrange rides through TNC-provied online-
enabled application and not through phone call or booking service;
k) Driver is prohibited from accepting passengers in the airports, unless authorized by the
airport management;
l) Driver must display during trips his Identification Card prescribed by LTFRB;
m) Passengers must be insured with the LTFRB accredited personal accident insurance
providers; and
n) Operators and their drivers must comply with the rules and regulations issued by
government agencies.
Validity: One year and may be renewed. Grantee must always remain in good standing
with the TNC.”
For purposes of this Department Order, the LTFRB is mandated to promulgate the
relevant implementing Memorandum Circular within thirty (30) days from date hereof.
Regarding the TNVS, considering than an accreditation by the TNC is required of the
TNVS applicant, the LTFRB is further directed to accredit the TNCs while waiting
guidance from the legislature regarding regulation of this new industry and to promulgate
the guidelines for their accreditation.
This Department Order amends and supersedes all issuances inconsistent herewith, and
shall take effect immediately, following its publication in a newspaper of general
circulation.
STATUTORY CONSTRUCTION
Public Utility
Are TNVS or Uber/Grab “partners”/drivers/vehicles considered public
utility/transportation?
In De Guzman vs CA, the court ruled that Art. 1732 of the Civil Code which defines a
common carrier Neither does distinguish between a carrier offering its services to the
"general public," i.e., the general community or population, and one who offers services
or solicits business only from a narrow segment of the general population. So understood,
the concept of "common carrier" under Article 1732 may be seen to coincide neatly with
the notion of "public service," under the Public Service Act (Commonwealth Act No. 1416,
as amended) which at least partially supplements the law on common carriers set forth in
the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, "public service"
includes: ... every person that now or hereafter may own, operate, manage, or control in
the Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any
common carrier…
(Comment: Meaning, as long as your thing is basically accessible to anybody, you are
a common carrier
As applied to Grab/Uber: Yes, Uber/Grab cars will only service those with the app.
But who can download the app and join Uber/Grab? Anybody. Public.)
LTFRB has the authority to regulate the operation of public land
transportation vehicles /public utility pursuant to EO 202 to grant franchises
or certificates of public convenience (“CPC”). This is in line with the standard
classification for public transport conveyance set in DO 2015-011 as a basis for issuances
of CPC for public utility vehicles. The CPC is an authorization from the government to
operate a public utility or a public service. Under the 1987 Constitution, a franchise
for the operation of a public utility must comply with the nationality
requirements. (Article 12, Section 11, 1987 Constitution.)
Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.
Article 1732 of the Civil Code
In our country, one of the means of transportation is with the Public Utility Vehicles.
Public Utility Vehicles also known as PUVs refer to a motor vehicle considered as a public
transport conveyance or common carrier duly registered with the Land Transportation
Office (LTO) and granted a franchise by the Land Transportation Franchising and
Regulatory Board (LTFRB).
Republic Act 10916
Since TNVS, such as Uber and Grab, are engaged in a business whose service is essential
to the general public and the vehicles are devoted to a use in which the public has an
interest, they are considered to be regulated by the LTFRB.
Technically speaking, Uber and Grab are but an app, a technological innovation that
allows lowly Manila commuters the comfort and convenience of a private car from point
A to point B. If passengers are in need of a ride and drivers who are willing to render
service can meet at a price set by the TNC itself.
Logically speaking, booking an Uber or Grab ride has the same public transportation
requirements: a vehicle, a destination, and the money you pay for fare. You book a ride
through Uber or Grab, you use a private vehicle for a public purpose.
Anything that involves operating land transport for the public is within the LTFRB’s
jurisdiction.
POLICE POWER
a. Lawful subject- the interest of the public in general as distinguished from those of a
particular class. The activity or property sought to be regulated affects the general welfare
if it does, then the enjoyment of the rights flowing therefrom may have to yield to the
interests of the greater number.
b. Lawful means- the means employed are reasonably necessary for the accomplishment
of the purpose, and not unduly oppressive on individuals.
The priority of LTFRB to regulate the operation of public land transportation vehicles
/public is to promote general welfare (passengers or commuters or the public). In the
guise of police power to promote public welfare, LTFRB must have jurisdiction over
Uber/Grab and other similar ride-sharing services and mandate them to abide the rules
and regulations of the said agency. The pre-arranged transportation services for
compensation using internet-based technology application sought to be regulated affects
the general welfare. Hence, the test of lawful subject is complies.
As to the lawful means, the means will soon be tested if it will be employed reasonably
necessary for the accomplishment of the purpose, and not unduly oppressive on
individuals.
This right of the state to regulate public utilities is founded upon the police
power, and statutes for the control and regulation of utilities are a legitimate
exercise thereof, for the protection of the public as well as of the utilities
themselves. Such statutes are, therefore, not unconstitutional, either impairing the
obligation of contracts, taking property without due process, or denying the equal
protection of the laws, especially inasmuch as the question whether or not private
property shall be devoted to a public and the consequent burdens assumed is ordinarily
for the owner to decide; and if he voluntarily places his property in public service he
cannot complain that it becomes subject to the regulatory powers of the state.
(Pangasinan Transportation Co., Inc vs Public Service Commission G.R. No.
47065, June 26, 1940)
TNCs and TNVs are obligated under a contract of carriage. As a common carrier, liability
attaches once the contract between a TN, a TNV, and a TNC is executed. A TNC therefore
cannot evade liability by contending that they are merely a technological platform to
connect the TNP with the TND. The TNC is the means and method by which the
transportation service is arranged and facilitated. Furthermore, they amass profit from
facilitating the TNVs. They must be responsible for the service they provide and
be held liable for any breach on the contract of carriage. Towards this end,
the State shall enact measures for the development and regulation of
transportation network companies and vehicles and to ensure the safety of
both the driver and the riding public. (Senate Bill No. 1001, filed by Sen.
Gatchalian) ((Sorry di siya legally binding kasi bill pa lang siya as of the moment pero the
reasons behind may be convincing why it should be regulated ))
Likewise, former Transportation Sec. Mar Roxas issued Department Order No.
2012-01 mandating the strict implementation of of precautionary, safety and
security measures to ensure safe, fast, efficient and reliable transportation
services. This order directed the observance of passenger rights:
1. All agencies regulating transportation providers shall ensure that the following rights
of all passengers are observed at all times:
1.1. Every public transport vehicle conveying passengers and cargo is duly registered with
the concerned regulating agency and possesses the required safety and security
certificates.”