RIDE-SHARING platform Uber (Uber Systems, Inc.) on Tuesday expressed concern over the planned regulations for transport network companies (TNCs) by the Land Transportation Franchising and Regulatory Board (LTFRB).

“The idea of limiting ride-sharing to a fixed number of supply will ultimately be damaging to the industry. It’s all about being demand-responsive… and getting cars on the road when they are needed,” Uber Philippines General Manager Laurence Cua said in a press briefing on Tuesday.

Mr. Cua was reacting to the LTFRB’s proposal to regulate the operation of TNCs by putting a cap on the number of Transport Network Vehicle Services (TNVS) on the road and requiring a minimum number of hours of operation.

Mr. Cua noted putting a minimum number of hours of operation would result in many part-time drivers losing an additional source of income. He added around 60% of Uber drivers operate on a part-time basis, some of which are overseas Filipino workers, single parents and people with day jobs who want to earn extra income.

“People go to the office using Uber cars and also go home using Uber… [with the planned regulation], people will go back to buying cars,” he said.

Mr. Cua said Uber is amenable to regulations similar to a proposal by lawmakers to give the TNCs a single franchise, instead of having to approve individual transport network vehicle service (TNVS) applications.

Since the LTFRB directed a crackdown on illegal TNVS on July 11, Mr. Cua noted more Uber drivers have gone offline due to worries they will be apprehended.

”Each week, around 200,000 requests from riders go unfulfilled… Suspension of driver activations means more people can’t book a ride. There is a gap between supply and demand,” he said.

Damian Kassabgi, Uber head of policy for Asia Pacific, said the planned LTFRB regulations are meant for taxi operations and are not in tune with the company’s business model of Uber.

“There are big differences between taxi vs. ride-sharing… Asking for transparency of fare dynamics [means] there is a fundamental misunderstanding,” Mr. Kassabgi said, noting ride-sharing is built on the concept of providing a vehicle when there is demand.

Fare pricing is also dependent on the availability of cars and the volume of demand. TNCs operate on the basis of demand, responding to requests of users at any time from any operating location, unlike taxi companies, which put a specific number of cars on the road irrespective of demand.

Compared with other countries in the region, Mr. Kassabgi said there are high barriers to entry for ride-sharing companies in the Philippines. For instance, the process to secure a permit requires 16 documents and takes 3 months.

Also, the three-year age limit for cars to operate on the road is stricter than the regulations in Singapore, which provides for 10 years, Australia (eight years), and Vietnam (12 years).

Countries such as Malaysia, Australia, New Zealand, Singapore, and the United States of America do not impose supply caps, and Vietnam, Malaysia, and Australia also allow for flexible pricing.

Mr. Kassabgi said that Uber can help in simplifying the process and ease the LTFRB backlog. He also said that they will support a new regulatory framework and for stronger TNC regulations that promote public safety.

Meanwhile, the LTFRB issued a show-cause order for Uber Philippines, saying that they violated the July 26 Order directing TNCs to stop accreditation and/or activation of TNVS. The hearing will be held today.

Asked about the said show-cause order, Mr. Cua said that they will explain their side to the LTFRB and reiterated their previous statements that they stopped accreditation and/or activation since July 18.

THE PHILIPPINES’ $23-billion outsourcing empire is facing mounting risks: China is rising quickly as a competitor, the government wants to cut some incentives and a siege in the south of the country is worrying investors.

“We need to put our act together,” Rey Untal, head of the Philippine association of outsourcing companies, said in an interview in Manila. “The other countries know how big this IT business process outsourcing pie is globally and they want to increase their share. This is not a static world.”

Armed with a high-level of English proficiency, a young population and cheap labor, the Philippines has emerged as one of the global leaders of outsourcing with companies such as Accenture Plc among those who’ve invested. But its position is now under threat with China ranked ahead of the Philippines in terms of competitiveness, advisory firm Tholons said in a June report.

“It really is a significant wake-up call,” Mr. Untal said on July 28. “It’s good in a way. Sometimes you need to be jolted. Many of the countries that compete with us directly are enhancing all the parameters that make them competitive — talent, infrastructure, incentives.”

In recent years, China has built state-of-the-art technology parks and funded universities to offer courses specifically on outsourcing. China is targeting $100 billion of outsourcing revenue by 2020, focusing on digital, high-technology services, according to a plan by the Ministry of Commerce.

The IT Business Process Association of the Philippines is aiming for $39 billion of revenue by 2022. The industry is the country’s biggest source of private jobs, according to London-based research and consulting firm Oxford Business Group, with more than a million workers in 2016.

Aside from competition, the industry is also bracing for a government plan to reduce some tax incentives. The finance department plans to submit a bill to lawmakers to remove the preferential tax rate on salaries of some executives working in regional headquarters including those of outsourcing companies.

At the same time, rising security risks in the south could damp appetite for expansion in the provinces. The government is waging a protracted battle with Islamic State-linked militants in Marawi City, and has placed the island of Mindanao under martial law until the end of the year.

“Business process outsourcing is very important for dollar supply, especially now that the country might slip into a current-account deficit,” said Michael Enriquez, chief investment officer at Sun Life of Canada Philippines, Inc. in Manila. “There’s a lot of threats to the growth of the sector, but BPOs will continue to prosper here as long as there’s government support.”

The risks of a slowdown in outsourcing coupled with faltering remittances and higher trade deficits may exacerbate the weakness in the peso, Asia’s worst performing currency this year. The central bank is forecasting the nation’s first current-account deficit in 15 years in 2017, removing a key support for the currency.

“The challenges we have are already significant,” Mr. Untal said. “We don’t need additional challenges.” — Bloomberg