By Imee Charlee C. Delavin
Senior Reporter
RIDE-SHARING companies Uber Systems, Inc. and Grab were yesterday fined P5 million each by the Land Transportation Franchising and Regulatory Board (LTFRB) for allowing their drivers to operate without permits which violated the terms of their accreditation.
Although the penalty should have been revocation of accreditation, LTFRB board member and spokesperson Aileen A. Lizada, said doing so would be detrimental to the riding public given the demand for the ride-hailing platform apps.
“If we follow the penalty imposed by MC (Memorandum Circular) 2015-016, the penalty is cancellation of accreditation, but we have been very constant in our stand that the LTFRB stakeholders are the riding public, so we will consider the riding public’s concern because if we penalize by canceling the accreditation, we are penalizing our stakeholders kasi wala silang masasakyan so we have to address the violations of the TNCs (Transport Network Companies) separately,” Ms. Lizada told reporters yesterday, adding that suspension would also result in the same consequence.
The regulator on Tuesday set an accreditation hearing for Grab and Uber as their accreditation is set to expire this month and next month, respectively.
Classified as TNCs, Grab and Uber said yesterday that they allowed Transport Network Vehicle Service (TNVS) drivers to operate even if they lacked the necessary permits, citing demand and also the need to continue their business and competition.
“[T]he fine is justified because there was negligence, I think that’s the right word on our part for non-compliance, but all was done in the spirit of competition and all was done in the spirit of earnings for our Grab partners,” Brian P. Cu, Grab Philippine country head, said.
“We’re actually quite happy with the decision, it’s not cancellation, it’s not suspension, we as TNC along with our Grab partners will be able to continue the quality service that we’re providing to our partners,” he added.
Grab also cited the need for continuous operations in the public’s behalf, despite some of their drivers operating without permits.
The LTFRB gives two types of permits to TNVS drivers, the provisional authority permits valid for 45 to 135 days, and the Certificate of Public Convenience (CPC) franchise which is valid for one to seven years.
LTFRB Memorandum Circular 2015-015 requires that a TNC obtain LTFRB accreditation, valid for two years, before being allowed to operate.
Uber said in a statement it will comply with the order issued by LTFRB on the fine.
“We thank the LTFRB for recognizing the important role ride-sharing plays in our country’s transportation system. We look forward to working with the LTFRB and the DoTr (Department of Transportation) towards sustainable mobility solutions for the benefit of all our riders and drivers. We will comply with the order issued by the LTFRB,” the company said in a statement when sought for comment.
Ms. Lizada said LTFRB will not set a deadline yet for Uber and Grab to remove from their service those driving without necessary permits but will form a technical working group instead to coordinate with the ride-sharing companies before setting a deadline.
Sought for more details, a Grab representative said LTFRB did not disclose yet the details on how to settle the fine, although Grab said it will comply with whatever LTFRB requires — either payment in full or in tranches.
“[The fine is] primarily for violation committed by drivers without provisional authority,” Grab said, and noted that regarding the renewal of franchise, there is “no black and white statement yet on the renewal.”
