The absence of any clear policy from LTFRB has left the fare discounts open to interpretations.
The discussions on who should shoulder the 20-percent discount for senior citizens, persons with disabilities (PWDs) and students in the ride-hailing service have generated no clarity.
Transport Network Companies (TNCs) are taking the flak from the controversy because of the wrong impression that they receive a significant share of the income earned by their Transportation Network Vehicle Service (TNVS) operators
The Land Transportation Franchising and Regulatory Board (LTFRB), during a recent public hearing of the Senate Committee on Public Services, opined that TNVS drivers, who spend for the fuel and maintenance of the vehicle, should not shoulder the 20-percent discount.
TNVS operators or drivers in the past have been absorbing a portion of the discounted fare. This practice, however, is not borne out of existing regulations or ordinances on who should bear the cost and to what extent.
The government or regulators, thus, should develop a fair, sustainable and forward-looking regulatory framework for resolving the issues in the TNVS ecosystem, while balancing economic sustainability with social responsibility.
Perhaps, it would help to clarify the issue if the respective roles of the TNCs and TNVS operators are intelligibly defined. TNCs offer ride-hailing services through the private vehicles registered with them.
The TNVS, on the other hand, offers a specific service within a TNC platform for drivers and their vehicles. TNVS operates through smartphone applications managed by TNCs to connect passengers with accredited private vehicles and drivers.
The ride-hailing platforms have become popular among Filipino passengers because they provide a reliable means of transportation at their fingertips, or cell phones. Grab Angkas, Joyride and Movelt are now household household names. They provide more convenient and efficient alternatives than traditional taxis.
Like any new industry, TNCs and TNVS are evolving. Regulations and policies must adapt to the industry’s growth. In the case of special fare discounts, regulators must strike a fair and balanced approach. The absence of any clear policy from LTFRB has left the fare discounts open to interpretations.
The confusion over the fare discounts has prompted some TNVS operators or drivers to frequently cancel the bookings of passengers belonging to the senior citizens, PWDs, students and the athletic sectors.
The discount rate by law is based on the actual fare for the transportation service provided to the passenger by the driver-operators, or actual franchise holders like jeepney drivers.
The TNVS drivers can be considered franchisees, enabling them to operate and earn a livelihood by providing passenger services. The TNVS can be likened to other PUV drivers like jeepneys. Jeepney drivers provide the full discount of 20 pecent to senior citizens, students/athletes and PWDs.
To illustrate further, TNVS are the jeepneys (service providers) and the TNC platforms are the barkers (connecting passengers and drivers). In this ecosystem, the discount is given by the driver or operator, and not the barker.
TNVS can also be likened to airlines (service providers), with the TNC companies acting as the online ticket booking platforms (connecting passengers and airlines). In this arrangement, the discount is given by the airline, not by the online booking platform.
The recent Senate hearings have found out that TNVS drivers are getting support from the TNCs that decided to share part of the discount cost to ease the financial impact on driver partners.
Thus, any regulation that compels TNCs to assume the applicable 20 percent discount is not based on any existing law because the discount is derived from the provision of transportation service, which in turn is provided by the TNVS driver-operators―and not by the TNCs.
Compelling the TNCs to either shoulder the 20-percent discount in full or reimburse the value of such discount to TNVS driver-partners would require legislative amendments to the existing laws.
More importantly, the government must take into consideration the economic contribution of TNC companies, particularly in generating livelihood for driver partners.
It is the role of the government to improve the business environment. And it must ensure that the implementation of the special discounts does not harm business sustainability and profitability.
A rash policy will impact the livelihood of small players, such as Micro, Small and Medium Enterprises―and independent contractors like transport providers.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com