100,000 new ride-hailing vehicles, sana all!

Malacañang’s announcement that GRAB has offered an “investment commitment” of 500,000 jobs in the local ride hailing industry is great news to the riding public and THE economy. Earlier, President Bongbong Marcos met with GRAB CEO Anthony Tan and discussed ways to modernize the country’s transport system including legalization of motorcycle taxis and removing caps on (Transport Network Vehicle Services) TNVS.

Land Transportation Franchising and Regulatory Board (LTFRB) Chair Teofilo Guadiz III consequently announced they will initially allow 100,000 vehicles to obtain TNVS franchises. “500,000 new jobs with the creation of 100,000 motor vehicles both in 4-wheeled cars and motorcycle taxis, but 100,000 is initial”, Guadiz added. Recent reports also indicated that the new TNVS will not be exclusive to one transport network company (TNC).

This means that aside from leader GRAB, other TNC companies such as JOYRIDE, ANGKAS, MOVEIT, OWTO, TOK TOK, AVIS Philippines, ePickMeUP and Cloud Panda will get a share from these new TNVS franchises. How this will happen in the immediate future, we will closely watch.

GRAB, a Singaporean multinational technology company operating in Southeast Asia, continues to be under fire from some members of Congress and the Philippine Competition Commission (PCC), on its buy-out of motorcycle operator MOVEIT. Critics claim this circumvented the accreditation process of the multi-sectoral technical working Group tasked by Congress to draft the motorcycle taxi law, pass it, and formulate the IIR. They claim the buy-out allowed GRAB unimpeded entry into another industry.

LTFRB also conducted multiple hearings on GRAB’s alleged overcharging of passengers thru “fare surge fees”, “short trip rides” including treatment of drivers. But the ride hailing company insisted on its compliance to LTFRB rules, and was ordered to submit a final reply, as of January 27. The case is now up for resolution by the board this month.

Today, only an estimated 20,000 GRAB TNVS are servicing passengers in Metro Manila, a very far figure from its pre-pandemic number of 65,000 vehicles. This driver/vehicle shortage hit hard millions of shoppers and holiday makers throughout December, aggravated by other problems in our “broken” Metro Manila transport system. GRAB CEO Anthony Tan however, told the President Bongbong Marcos in Malacañang that their motorcycle taxis are doing four to five million rides a day and that “it’s just a matter of unshackling things so their company could soar further”.

Presently, supply of TNVS has dwindled by as much as 65 percent over the past three years, one of the many negative effects of the pandemic. GRAB drivers lost their mortgaged cars after failing to pay their amortizations, while some simply found other jobs online during the height of the pandemic.

Honestly, the country really needs a much deeper and more diverse supply of public transport modes. Our train lines can be counted on one hand but will soon close for rehab in the next five years, our buses are not enough to complement the demand for trains, our taxis are clunky and are often discriminating, and our jeepneys inadequate. Ride-hailing — be it four wheels or two wheels — while not enough, could help address the needs of certain demographics, complementing the whole transport ecosystem. And with our population of more than 110 million, our transport infrastructure could not keep pace with the demands.

I believe that Government’s decision to increase TNVS by 100,000 or more is a correct move. It could help reduce “wait times” and provide commuters with a more reliable and efficient transportation option. In economics, mobility is a strong driver to either grow or shrink. By addressing the transport needs of its populace, our country will be on a steady trajectory for economic growth.

In other countries, they do not put a supply cap on their respective ride-hailing sectors and frankly, they have become more efficient in maintaining their own transport ecosystems, while generating more livelihood and helping their economies recover and grow.

But here, our government should immediately review its certain policies that hinder the market from deploying more TNVS on the road. For instance, LTFRB should simplify and fast track the issuance of franchises. Imagine, 100,000 new TNVS applicants will be forthcoming, when today LTFRB can only process and hear 100 applications per day. At this speed, it will take more than two and a half years to finish approving all franchises.

Unlike traditional modes such as jeepneys, taxis, and buses, TNVS are independent operators of public transport. Simply put: While traditional fleet owners need to submit only one application for their fleet of vehicles, each TNVS operator needs to file separately for own franchise. Aside from the slow process and presence of fixers inside and outside the LTFRB premises, operators are required to submit seventeen (17) documents that usually takes anywhere from a month to three months processing.

And mind you, almost 80 percent applications are rejected because of bank certifications. I am referring to a single requirement imposed by LTFRB in 2019; the certificate of conformity (COC) that is essentially “proof” that the bank financing the TNVS car loan is allowing its usage as a ride-hailing vehicle. Banks are very strict on these loans because they believed that the mortgaged cars’ roadworthiness are affected. Hence, if the unit is repossessed, its resale value will be lower. Some banks ask applicants to restructure their loans before approval which means higher and unaffordable premiums.

If LTFRB wants immediate deployment of these new TNVS franchises, it should immediately intercede with banks or otherwise just remove the requirement. How can this tedious LTFRB process become attractive to private car and motorcycle owners who will use their vehicles for public transportation? Can LTFRB handle tens of thousands of new TNVS applications once they receive them after formal announcements in the coming weeks or months?

LTFRB chairman, Teofilo Guadiz III, the ball is on your court!
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