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Rules rule

By: Dr. Ramon Ricardo A. Roque, CESOI, Diplomate

The Land Transportation Franchising and Regulatory Board (LTFRB) is well within the limits of its powers as a regulatory body, and is simply performing its mandate, on the issue of its crackdown against illegally operating Transport Network Vehicle Service (TNVS) providers affiliated with the two operating Transport Network Companies (TNCs) in the country – Uber and Grab.

Only less than 4,000 TNVS providers were given franchise by the LTFRB but based on the admission of both Uber and Grab, about 56,000 TNVS providers are currently operating in the country.

How did this happen?

The TNC-TNVS operating model calls for private car owners to “share-a-ride” for a fee. One can probably extend the model to include the operations of TNVS providers during their “free time.” These are what TNCs represented to the LTFRB.

The current mess is obviously caused by the fact that the TNCs did not sell such business model to potential TNVS providers. TNCs instead marketed TNVS providers as a full-time business venture. At the very least, it now appears that TNCs do not screen TNVS applicants to make sure that they fit in the LTFRB-approved business model for the industry.

The number of TNVS providers now is a clear proof of this.

The LTFRB accredits the TNCs and it issues franchise to TNVS providers. Given this simple to understand system, the TNCs should not absorb TNVS providers unless they have franchise from the LTFRB.

The current mess happened because TNCs allows TNVS providers to use their system even if the latter do not have franchise.

The TNCs are obviously at fault and they cannot claim ignorance of the rules. TNVS providers are at fault because they did not bother to know the rules. They can also be considered victims of the obviously self-serving interests of the TNCs.

The LTFRB is not totally without fault and a fair share of the blame. While it ordered the TNCs not to accredit or take in TNVS providers as early as July 2016, the agency did not effectively implement its order. It is unlikely that the LTFRB had no knowledge of how actively the TNCs are recruiting TNVS providers in the social media. It also appears now that the LTFRB does not have a monitoring system that can effectively provide information on the TNCs compliance with the rules.

Rules should rule. Now that the LTFRB crackdown against TNCs and TNVS has been suspended following the Senate’s inquiry into the matter, the government should be clear on what the rules should be and it should also be firm on the enforcement of such rules.

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