TNC-TNVS: New Classification for Public Transport Conveyances in the Philippines (Borgjie B. Distura)

 

INTRODUCTION

The worsening traffic congestion in metropolitan areas calls for some innovations in the transport system. One of the innovations in the transportation industry is the “Online-Enabled Transportation Service (OETS)” that connects drivers with potential customers who request a ride. The internet-based digital technology application (“Application”) provides services by connecting available registered vehicles with registered customers who request rides. Once a request is accepted, the driver picks up the customers and brings them to their destination. Globally, the service providers which provide this type of Application and facilitate this new type of transportation service is referred to by many jurisdictions as Transportation Network Companies (TNC).[1]

In short, TNC provides for ridesharing using digital platforms. TNC is defined, borrowing from California Public Utilities Commission, as an “organization whether a corporation, partnership, sole proprietor, or other form, that provides pre-arranged transportation services for compensation using an online-enabled application or platform technology to connect passengers with drivers using their personal vehicles.” In this jurisdiction, TNC shall mean 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.”.[2]

The Department of Transportation and Communication issued Department Order No. 2015-11 last May 8, 2015 regulating and recognizing new transport systems in the Philippines such as TNVS. The country is one of the first in the world to regulate this service. The objective of such regulation and recognition is to increase mobility on major thoroughfares, boost travel times, improve the quality, sustainability and reliability of public transport services, and respond to the needs of the modern commuter.

However, other public transport operators and companies expressed their opposition particularly to TNVS or Transport Network Vehicle Service[3] wherein the said order does not require TNVS compliance with certain requirements like franchise and insurance coverage.

Land Transportation Franchising and Regulatory Board (LTFRB) issued a series of circulars for the regulation of such TNC and TNVS. The regulatory board issued guidelines for the implementation of DO 2015-11, rules and regulation governing accreditation of TNCs,[4] terms and conditions for the application of certificate of public convenience.[5]

Despite the issuance, the opposing parties averred that there is a material and substantial invasion of the rights especially those holders of Certificates of Public Convenience. This led them to seek the assistance of the court and requested for a TRO against the operation of TNVS. Their request was granted by Quezon City RTC which suspended the operations of the app-based transport services of Uber and GrabCar for 20 days. The said TRO also canceled the LTFRB’s Memorandum Circulars 2015-15 to 18 which cover the accreditation of transportation network companies and issuance of franchises to TNVS.[6]

Other new conveyances recognized by DOTC in DO 2015-11 are the following:

1.      Bus rapid transit (BRT) is a high quality bus-based public transport system that is able to achieve shorter travel times and high passenger volumes, based on use of segregated public transport lanes, electronic fare payment systems, and stations and vehicles designed for fast boarding and alighting. Centralized control of bus operations avoids unsafe on-street competition for passengers, reduces bunching, and improves reliability.

2.      Airport Bus

3.      Premium Taxi

4.      Transportation Network Vehicle Service

As of this writing, there is another type of public conveyance being introduced by one of the TNCs, the so called GrabBike. LTFRB stopped the operation of said service due to safety and authorization issues and for the main reason that bikes and motorcycles are neither authorized by the Board nor by DOTC to be offered to the public as a mode of public transportation.[7]

ON THE REGULATORY POWER OF LTFRB OVER TNC

The main issue connected with the discussion in class on Administrative Law and which this paper seeks to resolve is:

Whether TNC and the TNVS are under the regulatory power of LTFRB.

In resolving the issue in the affirmative, the paper presents the discussion in this wise. First, a brief history of ridesharing is in order. Second part defines some relevant terms. Third part provides the legal and historical foundations of LTFRB’s land transportation regulatory power. And finally, the conclusion.

I. BRIEF HISTORY OF RIDESHARING

Ridesharing (also car-sharing, carpooling and covoiturage), is the sharing of car journeys so that more than one person travels in a car.[8]

According to a publication by MIT’s Rideshare Research, the history of ridesharing rides almost along with the invention of the automobile itself and declined in the 70s due to the 1973 oil crisis and the 1979 energy crisis.[9]

Recently, however, the Internet has facilitated growth for ridesharing and the commute share mode.[10] Increasing efforts to curb climate change today, accords ridesharing as a powerful strategy to reduce congestion, emissions, and fossil fuel dependency.[11]

Recognition of ridesharing in the Philippines came in 2015 with the issuance of DO 2015-11 on May 8, 2015 by the DOTC premised on the rapid growth and urbanization in cities and municipalities vis-à-vis the mobility issue that has since swallowed up the country since time immemorial.

II. CONCEPTS

Public Service being a broad concept is defined in Commonwealth ACT 146 so as to include 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, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whether may be its classification, freight or carrier service of any class, express service, steamboat or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services.

The definition provided by CA 146 in effect includes the concept of public utility being narrower in scope than public service.

Public Utility is defined as a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service.[12]

The Supreme Court also held that public utilities are privately owned and operated business whose services are essential to the general public…The same is true with respect to the business of common carrier which holds such a peculiar relation to the public interest that there is superinduced upon it the right of public regulation when private properties are affected with public interest hence they cease to be juris private only. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect grants to the public an interest in that use, and must submit to the control by the public for the common good, to the extent of the interest he has thus created.[13]

Common Carrier is a concept much narrower than public utility and is logically embraced in the purview of the latter. The New Civil Code of the Philippines defines common carriers as 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.[14]

Characteristics of common carriers are laid down in the cases of De Guzman v. Court of Appeals,[15] FPIC v. CA,[16] Asia Lighterage and Shipping Inc v. CA[17] and Fabre, Jr. v. CA[18] as follows:

1.      In De Guzman the Supreme Court said that:

a.       Art. 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as a “sideline”)

b.      Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis.

c.       Article 1732 does not 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.

d.      A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers.

2.      In FPIC the Court adds:

e.       The Civil Code makes no distinction as to the means of transporting, as long as it is by land, water or air.

f.        The Civil Code does not provide that the transportation should be by a motor vehicle

3.      Asia Lighterage also adds:

g.      A person or entity may be a common carrier even if he has no fixed and publicly known route, maintains no terminals, and issues no tickets.

4.      And finally in Fabre the Court declared that

h.      A person or entity need not be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them

Without going any further into the details and due to the limited space and running the risk of delving into the semantics, we can deduce from the given contexts, definitions and characterizations that TNCs and TNVS’s come within the circumferential hold of LTFRB, an agency of the Philippine government under the Department of Transportation and Communications responsible for promulgating, administering, enforcing, and monitoring compliance of policies, laws, and regulations of public land transportation services.

TNCs and TVNS’s come under the concept of common carrier as persons, corporations, firms or associations engaged in the business of carrying or transporting passengers…by land…for compensation, offering their services to the public notwithstanding their utilization of internet-based digital technology application in their system of operation. As a consequence, the seven (7) characteristics above will appropriately apply to them.

III. HISTORICO-LEGAL FOUNDATIONS

LTFRB is under DOTC as a regulatory board which has quasi judicial powers and functions with respect to land transportation.[19] The basis of regulation of public utilities involved in land transportation is the so called police power. It is founded upon such power of the State. The exercise of police power is justified because whenever private property is used for a public purpose and is affected with public interest, it ceases to be juris privati and becomes subject to regulation.

The regulatory land transportation dates back to the early 1900s. The LTFRB therefore, is a product of a series of transformations. The evolutionary progression runs as thus[20]:

 

Coastwise Rate Commission———————————————1902

Supervising Railway Expert———————————————-1906

Board of Public Utility Commissioners————————————–1913

Public Utilities Commission———————————————-1917

Public Service Commission———————————————–1926

Specialized Regulatory Boards, specifically the Division of Land Transportation—–1972

Board of Transportation————————————————–1979

Land Transportation Commission——————————————1985

Land Transportation Franchising & Regulatory Board—————————1987

The Board pursuant to EO 202, Sec. 5 has the following powers

a.       To prescribe and regulate routes of service, economically viable capacities and zones or areas of operation of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications;

b.      To issue , amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public Land Transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefore;

c.       To determine, prescribe and approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation  of public land transportation services provided by motorized vehicles;

xxx                  xxx                  xxx

j.        To fix, impose and collect, and periodically review and adjust, reasonable fees and other related charges for services rendered;

k.      To formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities, standard measurements and/ or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations;

CONCLUSION

Given the disquisitions above, it is submitted that the Land Transportation Franchising and Regulatory Board (LTFRB) has regulatory power over TNC and TVNS.

ENDNOTES:
[1] DOTC DO No 2015-11
[2] ibid
[3] Refers to vehicle owners who provide pre-arranged transportation services through the use of a TNC provided internet-based digital technology application like Grab, Uber, Tripda and EasyTaxi on an internet connected device.
[4] LTFRB MC No 2015-15. The circular applies only to accreditation of TNCs in which the application may be made in writing by the applicant, natural or juridical person provided that the latter is represented by a duly authorized person. The certificate of accreditation which is non-transferable is valid for a period of 2 years.
[5] LTFRB MC No 2015-17 and MC No 2015-18. Some of the conditions of TNVS’ Certificate of Public Convenience (CPC) are:

 

a.        All transportation must be pre-arranged through the use of an app on an internet-connected device.

b.       The operator shall ensure that an internet-connected digital device is always carried by the driver during the pre-arranged ride and connected to the TNC provided digital technology application.

c.        The operator shall not display any advertisement on the exterior of the vehicle or a component of the trade dress unless approved by the Board.

d.       The driver can only carry up to a maximum of seven (7) passengers but not exceeding the designed seating capacity of the vehicle.

e.        The diver is prohibited from accepting street hails including hand gestures, verbal statements or through phone calls or booking service from potential passengers other than a TNC provided digital technology application. It is likewise prohibited to pick-up passengers at the airports unless authorized by the airport management.
[6] http://www. Philstar.com/nation/2015/12/041528956/court-suspends-uber-grabcar-operations (last accessed, January 28, 2016)
[7] http://technology.inquirer.net/46378/ltfrb-stops-motorcycle-service-grabbike (Last accessed, Jan. 28, 2016)
[8] https://en.wikipedia.org/wiki/Carpool (Last accessed, Feb. 3, 2016)
[9] http://ridesharechoices.scripts.mit.edu/home/histstats/ (Last accessed, Feb. 3, 2016)
[10] Chan, Nelson D. & Susan A. Shaheen (2012) Ridesharing in North America: Past, Present, and Future. Transport Reviews 32 (1): 93–112. (Available at http://innovativemobility.org/wp-content/uploads/2015/01/Ridesharing_in_North_America_Past__Present__and_Future.pdf )
[11] Ibid.
[12] NPC vs Court of Appeals, et al., GR No. 112702, September 26, 1992 citing 64 AM. JUR. 549cited as footnote No. 1 in Albano v. Reyes, G.R. No. 83551, July 11, 1989. Emphasis by the author.
[13] KMU Labor Center v. Hon. Jesus Garcia, Jr. G.R. No. 115381, December 23, 1994, citing Pantranco v. Public Service Commission, 70 Phil. 221. Emphasis by the author.
[14] Art. 1732
[15] G.R. No. L-47822, December 22, 1988
[16] G.R. No. 125948, Dec. 29,1988
[17] G.R. No. 147246, Aug. 19, 2003
[18] G.R. No. 111127, July 26, 1996
[19] Title XV, Chapter 5, Sec. 15 of EO 292
[20] http://ltfrb.gov.ph/main/aboutus#sthash.mZaQGfgt.dpbs (Last accessed Feb 3, 2016)

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