Philippines weighs options for regulating Uber after public outcry against crackdown

On November 24, the Uber saga in the Philippines takes a new turn as the government begins public consultations to solve a pressing issue at hand: how to regulate the company’s operations.

The government has been under pressure from taxi operators calling for a crackdown on what they consider illegal, unlicensed service from Uber that they fear will eat into their profit margins.

But after a sting operation against an Uber vehicle sparked public outrage last month, regulators have taken a soft stance on the car-booking service.

Transportation regulators, led by the Land Transportation Franchising and Regulatory Board (LTFRB), acknowledge that innovations like Uber are attractive alternatives for commuters who have relentlessly complained about the worsening state of the taxi industry in the country.

The LTFRB met with Uber executives in Manila and both parties agreed to look for ways to accommodate Uber’s service within the bounds of law. How this compromise will affect the company remains to be seen.

Government oversight needed

Much of the dilemma in regulating Uber lies in the uniqueness of its service: Uber is a technology company that connects passengers and vehicles through its app. It doesn’t own the vehicles, but only partners with the private owners. Passengers pay for the rides using their credit cards registered on the app. The fares are split between Uber and the vehicle owners.

Authorities are convinced that because Uber caters to the public, there has to be some oversight. Someone has to make sure that the drivers are adequately screened and passengers are insured. There should also be a system for imposing fines in case of violations such as overcharging.

The usual argument is that Uber isn’t subject to the regulation of the LTFRB since it doesn’t own the vehicles. It is the duty of the vehicle owners themselves to get permits from the transportation regulatory board.

But Uber, as the entity that mobilizes the vehicles, has to make sure it partners only with vehicles that are compliant, otherwise it’ll be accused of aiding and abetting in the violation of the law.

Uber’s case is different than that of close counterparts like GrabTaxi and EasyTaxi, which have both been able to do their business smoothly as they make use of existing taxi fleets duly registered with the LTFRB.

With all considerations in mind, it’s no longer a question of whether or not Uber’s service should be subject to government oversight. What government needs to figure out is how to regulate Uber in such a way that neither Uber nor the incumbent taxi industry suffers unfairly.

The appeal of Uber comes from the fact that its partner vehicles are new, and – since they are private – give passengers the feeling of prestige. Ordering a car is easy and quick, payment is seamless, and drivers are courteous. Prices are not fixed – they may go lower or higher than taxi rates depending on demand. Passengers feel much safer as the location of the vehicles can be tracked and shared, and they can send instant feedback about their trips by rating them.