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Uber and Tripid hit speed bumps as the Philippine government cracks down on transportation apps

Uber-Tripid-regulation-Manila

Transportation tech startups Uberand Tripid are facing regulatory issues in the Philippines.

Interaksyon recently reported the national vehicular regulatory body in the Philippines states these companies violate the law.

Claiming that both Uber and Tripid provide “a public service,” Land Transportation Franchising and Regulatory Board (LTFRB) chair Winston Ginez told Interaksyon that in order for Tripid and Uber to operate as a business, they must secure a franchise. “What they are doing is a criminal violation of the Public Service Law,” said Ginez.

This Public Service Law, or Commonwealth Act No. 146, states that the LTFRB “shall have jurisdiction, supervision, and control over all public services and their franchises, equipment, and other properties.” This means that public transport vehicles like jeepneys, buses, and taxis in the Philippines are required to secure a franchise – a permit to operate as a public utility vehicle – from LTFRB before they can use the vehicles as a means for public transport.

Set for a public hearing

This is the reason why taxi hailing apps such as GrabTaxi and Easy Taxi have made their way into the Philippines without much friction. They simply partnered with taxi fleets and operators that already have existing franchises, and then provided them with the technology.

Uber’s methods for recruiting drivers tend to vary city-to-city as far as we can tell. However, it’s clear that as a company, it tends to view its relationship to the driver as the core of its business, rather than its relationship to the livery service. In some cities, clear-cut transportation laws have led the company to reach out to drivers almost exclusively through livery services. However, in cities where private drivers work for themselves or small companies, Uber has been free to recruit drivers on an individual basis.

Whether Uber has partnered with large franchised livery services, individual professional drivers, or drivers that sit somewhere within a grey area, is something we are unsure of. In its official launch yesterday, the company declined to divulge on how it recruits its partners in Manila. [UPDATE 02/14] Uber recently responded to our query saying, “all of its partners have the appropriate license, registration and insurance in place to provide commercial transport under Filipino law.”

Tripid, on the other hand, promotes carpooling in the Philippines to lessen traffic through its app. So some Tripid users are car owners who want to share their vehicle, and others are non-car owners looking for someone to carpool with.

Ginez also told Interaksyon that the two transportation apps will be called to a public hearing to testify about the said ‘violations’.

Tech in Asia reached out to Uber and will update this article pending its response.

On its Facebook page, Tripid states there is no reason to provide a statement at this point because that the order from LTFRB has not been served to them yet. The post on Facebook reads:

We are more than happy to listen to the proposals of the LTFRB or its representatives to further explore initiatives that would help relieve congestion in the metro and improve our public transportation sector.

We are reminded that technology is not a solution, but merely a magnifier of intent. The technology behind Tripid is an irreversible trend, and ridesharing, in one form or another, will happen with or without our company. In this light, it is how we use technology that makes us who we are and what we become.

Transportation challenges remain

Apps like Uber and Tripid were created out of necessity. And unlike other cities in Asia, cities in the Philippines badly need the services these startups provide. Metropolitan areas suffer huge transportation issues that needs to be addressed. As a carpooling app, Tripid can help reduce the number of vehicles on the major roads, thereby decreasing traffic. Meanwhile, since crime incidents such as robbery have grown common recently in the Philippines, Uber can help offer a safer alternative.

But are the two transportation apps violating the law? Absolutely   not, since these startups do not own the vehicles used. But Ginez told Interaksyon that they are “providing a system for someone to violate a law.” A slippery slope argument at best, as if internet service providers should be considered criminals for providing hackers a means to violate the law.

Despite using private cars, Uber’s service nevertheless levels the playing field between town cars and taxis. If Uber is working with car owners or livery services that don’t operate with a franchise, it would seem that the government and Uber’s partners must find a way to obtain one for it to further its operations in Manila. As for Tripid, the line gets even blurrier given that these are private car owners who just want to carpool with a few people on the way. Where this issue will lead and how it will affect operations for the two startups is something we will watch closely.

(Photo: Flickr user Verzo)

(Editing by Paul Bischoff and Josh Horwitrz)



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