House solons want operations of Uber, GrabCar suspended

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A Technical Working Group (TWG) of the House Committee on Transportation has recommended the suspension of the local operations of car-sharing apps Uber and GrabCar until the Internet firms have complied with government regulation requirements.

LTFRB chair Winston Ginez and DOTC sec. Jun Abaya in a meeting with Uber executives
LTFRB chair Winston Ginez and DOTC sec. Jun Abaya in a meeting with Uber executives

The TWG also criticized the Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and Regulatory Board (LTFRB) for allowing private vehicles to be used as taxis while suspending the issuance of taxi franchises.

The DOTC earlier issued Department Order (DO) 2015-11, which provided for the legal framework for the operations of car-sharing apps, known formally as Transportation Network Companies (TNCs).

The department circular amended DO 97-1097, which set the standard classifications for public transport conveyances to be used as basis for the issuance of Certificates of Public Convenience for public utility vehicles.

The department order recognized new forms of transportation services such as the TNCs, which include Uber and GrabCars to promote mobility and modernize and improve transport services.

During the TWG meeting presided by Rep. Raneo E. Abu (2nd District, Batangas), the lawmakers decided that the operation of Uber and GrabCar and other similar platforms be suspended until they have complied with regulation requirements such as registration and installing GPS tracking and navigation devices.

Pending compliance, Abu said Uber and the likes are clearly classified as “colorum,” hence, he questioned the Philippine National Police (PNP) why it has not apprehended the vehicles using Uber and GrabCar.

Rep. Estrellita B. Suansing (1st District, Nueva Ecija) said Uber officials should appear before the committee to explain their business model.

“Why are they being allowed to operate when they are only listed as system developer? They are not certified transport services,” said Suansing.

Mary Anne Morales-Lagura, assistant director for the corporate and partnership registration division at the Securities and Exchange Commission (SEC), told the TWG that Uber Philippines Inc. is registered only as a system developer.

Suansing also questioned the rationale of opening the applications for TNCs when there is a standing moratorium for the issuance of taxi franchise. She said TNCs should utilize franchised taxis instead of privately owned vehicles.

On the issue of tax obligation, Suansing said that since TNCs issue receipts, they should be taxed not only for the commission in arranging the trip, but for the entire cost or fare collected from the passengers.

She urged the Bureau of Internal Revenue to study the business model of TNCs so the government can efficiently collect the right taxes.

On the liability issue, Suansing noted that the memorandum circulars issued by the LTFRB do not contain well-defined responsibilities and liabilities of the TNCs.

“Unlike the regulation currently imposed on regular taxis, the MCs are silent on the fines and penalties for offenses committed by erring drivers,” said Suansing.

Rep. Philip A. Pichay (1st District, Surigao del Sur) said tax obligation should be clear and that tax clearance from both the BIR and the Bureau of Customs (BOC) should be required from the TNCs.

Pichay requested Uber and GrabCar to submit to the panel copies of their income tax record and audited financial statements.

LTFRB acting director Robert Peig said following the instructions contained in DO 2015-11 dated May 8, 2015, the LTFRB issued MCs to set the rules and regulations concerning the following: accreditation of TNCs; certification of TNCs; and guidelines on the acceptance of application for a Certificate of Public Convenience (CPC) to operate a Transportation Network Vehicle Service (TNVS) in the country.

Earlier, Uber Philippines representative Donemark Calimon and Bryan Cu of GrabCar said that drivers of TNCs should be held liable for offenses and violations committed. They also agreed that TNCs must have tax obligations.

For the protection of the public, vehicle owners and drivers must be registered with the TNCs, according to them. Peig said the responsibilities and obligations of TNCs are found in MC 2015-18 and that TNCs have the same liabilities as any public utility operator.

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