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The new ‘taxi’

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

The franchise requirement of the Land Transportation Franchising and Regulatory Board (LTFRB) for transport network vehicle service (TNVS) providers operating within the system of transport network companies (TNCs) like Uber and Grab, should be non-negotiable. It is a requirement that clearly serves the interest of riding public.

The franchise is, among others, an accountability mechanism. It holds the one granted the franchise accountable not only for the quality of the service but also for the safety of the passengers.

One of the aspects of the current TNC-TNVS issue is the number of TNVS that will be granted franchise. This is not simply a matter of complying with the franchise requirements and being automatically granted a franchise.

The LTFRB has to decide on how many franchises to issue. This is clearly part of it regulatory functions. The number of cars on the road has a direct effect on the magnitude of our traffic problem.

It is really interesting to find out how will LTFRB determine the number of franchises for TNVS. Obviously, it should not only consider the impact of such number to the traffic problem. It should also consider the demand for the service and the number of existing public transportation service providers, particularly the taxis, which is in direct competition with the TNVS.

The Foundation for Economic Freedom (FEF) urges the LTFRB to scrap the limit on TNVS franchises. The same will promote competition by allowing market forces to prevail. The group asserted that free market forces are better for the public.

The LTFRB needs to seriously consider the position of FEF. Will the number of franchises for TNVS be affected by the number franchise that were already granted to taxis?

The TNC-TNVS became popular because the riding public, particularly those who ride taxis, were offered better value for their money.

Is it right for the riding public to be “forced” to ride taxis (and get lesser value in the process) just because there are no enough TNVS because of the limited number of franchises granted by the LTFRB?

In scrapping the limit on the number of franchises for TNVS, the taxi sector will be forced to reinvent itself and be of comparable value with the TNVS. Without reinventing itself, taxis will soon become a “thing of the past.”

If passengers want the TNVS to be the “new taxi,” the LTFRB should serve the public by not depriving them with enough TNVS providers.