TRANSPORTATION SECRETARY Arthur P. Tugade on Tuesday said the government is planning to put a “cap” on the wave of ride-sharing drivers applying for franchise once “compliance” among those who want to operate under the scheme is already established.

In a press briefing in Malacañang yesterday, Mr. Tugade said the measure is being studied because “the proportionate increase in the applicant and the users of the application of the TNCs (Transportation Network Companies) is not proportionate to the increase in those registering.”

In July last year, the government stopped processing new applications for Transport Network Vehicle Services (TNVS), the new category created for ride-sharing services.

Mr. Tugade said the suspension was enforced because the number of franchise applicants ballooned at that time.

“We wanted to have compliance. Once we have the compliance then we can establish a cap,” the transportation chief said.

“So habang kinukuha namin ’yung datos na ’to, pinag-aaralan ’yung possible cap, hanggang saan pwede magkaroon ang TNCs at TNVS sa kalsada (So as we gather the data, we are studying the possibility of putting a cap on how many TNCs and TNVS are allowed to operate on roads),” he added.

Last week, ride-sharing companies Uber Systems, Inc. and Grab were 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.

The regulatory body also accused the two companies of accepting new drivers even as government accreditation had been suspended since last year. Grab and Uber drivers have been urging LTFRB to lift the ban.

Classified as TNCs, Grab and Uber had said they allowed TNVs drivers to operate even if they lacked the necessary permits, citing demand and also the need to continue their business and competition.

According to Mr. Tugade, “less than 10%” of 56,000 ride-hailing drivers operating in major roads are registered. A statement by the DoTr said there are about 50,000 unaccredited TNVs operating in the country.

Mr. Tugade added that ride-sharing drivers still refuse to apply for franchise even as the Transportation department already imposed the Omnibus Franchising Guidelines for the modernization of public utility vehicles, which he said “terminated” the moratorium on TNVS applications.

“’Yung TNVS is in the concept and nature of a public utility. Hindi ho ba nararapat lang na saklaw ng regulatory function ng LTFRB ito (Isn’t it just right that they are within the LTFRB’s regulatory function)?” Mr. Tugade said.

“So na-lift na ho ’yan. Mag-a-apply ka ngayon (So the suspension is already lifted. They can apply now),” he added.

The LTFRB gives two types of permits to TNVS drivers, the provisional authority (PA) 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.

Starting on July 26, the LTFRB will apprehend Uber and Grab drivers who operate without a certificate of public convenience or provisional authority.

Ang sinasabi lang namin pakisunod naman yung proseso. Ang susunod dyan pakibayad yung tax (What we’re telling them is to follow the process and eventually pay taxes),” Mr. Tugade said.

Kung di sila mag-apply? Realistically, wrong kasi pahuhuli ko lahat yan (What if they don’t apply? Realistically, they’re wrong, I will order their apprehension),” he added.

Asked whether his department would consider giving TNCs more leeway to apply for franchise, Mr. Tugade said: “Let’s leave that judgement call to LTFRB kung ie-extend nila o hindi (if they will extend it or not).”

For its part, Uber said in a statement on Tuesday: “We are fully committed to working with the Land Transportation and Franchising Regulatory Board (LTFRB), but suspending vehicles with pending franchise applications will hurt millions of daily commuters who depend on transport network vehicle services to take them where they need to be, as well as everyday Filipinos and their families… making extra income.”

“We are grateful for the outpouring of support we have received from our riders and partners, and we look forward to the LTFRB’s Technical Working Group so we can all work together to draft regulations that embrace technology to keep the Philippines moving forward,” the company also said.

Grab was also sought for comment but has not responded as of this reporting.

In a statement on Tuesday, the LTFRB maintained that Grab and Uber “broke the rules” by tolerating colorum (informal term for illegal) vehicles.

LTFRB Chairman Martin B. Delgra III said in the statement: “The TNCs agreed to fully comply with the rules at the time they were granted accreditation. With their open and candid admission, it is clear that they have broken those rules grossly, putting at risk the tens of thousands of TNVs without PA or franchise to commit colorum activities.”

“We cannot have one rule regarding colorum for them and another rule for the rest of the modes of public transport, i.e. bus, UV express, taxi and public utility vehicles (PUJ),” Chairman Delgra said further in the statement. “Where service is imbued with public interest, no less than the safety and welfare of the riding public is concerned, regulations become priority.”

The LTFRB maintained that it has not suspended ride-sharing services, but said it would only allow those with PA or CPCs to operate.

The LTFRB also said that it has formed a Technical Working Group (TWG) on ride-sharing apps, which will “discuss issues such as accreditation and pending applications, and the core issues of accountability and dynamic pricing scheme as a way to move things forward.”

Mr. Delgra also said: “Don’t turn the commuters against us. It is the mess that you created (upon) yourselves.” This is in reference to widespread online support for ride-sharing services, including a petition at that had gathered 103,527 signatures as of 4:30 p.m. yesterday.

Winston Mr. Giñez, Delgra’s predecessor in the LTFRB, took to Facebook to air his thoughts on the issue: “The (then) DOTC and our Board in 2015 paved the entry of Transportation Network Vehicle Service (TNVS), like Uber, Grab and UHop, in the entire country. Despite the vociferous objections of taxi associations and operators and their allies in Congress, our Board issued and implemented LTFRB Memo Circulars Nos. 015 -018 to allow and regulate the operations of TNVS as common carriers.”

“For doing so, our country was hailed as the first country in the world to issue national regulations on TNVS. That was forward-looking. That was embracing disruptive technologies, not fighting them. That was promoting safety, convenience and comfort of the commuting public — the primary stakeholders of our agency,” Mr. Giñez added.

Senator Grace Poe, chair of the Senate Committee on Public Services, in a statement said: “We must acknowledge the fact that many of our commuters now rely on Transport Network Vehicles (TNVs) to travel around the city. The companies of TNVs provide services that taxi operators have been remiss to provide in the past decade — point-to-point pick-up and delivery, standardized fare, and safe and comfortable rides.”

“The TNVs provide the comfort and reliability that many of our people look for in public transportation. The LTFRB should therefore strike a balance between regulating TNVs and ensuring that the public need for safe, comfortable, and reliable transportation is met. Thus, until we are able to improve mass transportation, the LTFRB should defer its decision to disallow new applications from Grab and Uber drivers,” Senator Poe added.

The senator also said she will file a resolution and a bill to address these issues. — Ian Nicolas P. Cigaral and Patrizia Paola C. Marcelo