LTFRB OKs PHP2 per Minute Travel Rate, Reverses Earlier Ruling

The Land Transportation Franchising and Regulatory Board (LTFRB) has reversed its previous ruling after it allowed transport network companies (TNCs) to impose a PHP2-per-minute travel rate.

In Memorandum Circular 2018-019, the Board said that there is a need to "rationalize and adjust the fare structure for Transport Network vehicles service (TNVS) to maintain its viability."

The memorandum cited Executive Order 202, stating that the Board has the power to "determine, prescribe and approve and periodically adjust fares, rates and other charges relative to the operation of public land transportation services provided by motorized vehicles."

It also added the order from the Department of Transportation (DOTr) 2018-013, noting the LTFRB’s power over the TNCs and TNVs.

Section 4 of the DOTR order states that "The TNCs and TNVS are subject to the full regulation and supervision by the LTFRB, including but not limited to application and approval/denial of franchise, setting of fares, routes, operating conditions and imposition of fines, suspension and cancellation of franchise.

With finality, the Board said in the Circular that it "authorizes Transport Vehicle Service to charge TWO PESOS (P2.00) per minute of travel time from origin to destination as part of its fare structure…"

Despite the Board's approval, it has also set conditions; saying that the approval shall apply to all TNVS vehicle types and that electronic receipts shall provide a breakdown of the fare, which would reflect the flag down rate, per kilometer rate, travel time rate, and surge price.

The memorandum was signed by LTFRB chair Martin Delgra and Board Members Aileen Lizada and Ronaldo Corpus dated September 4.

Meanwhile, Grab Philippines Country Head Brian Cu welcomed the latest ruling from the Board.

"(The) LTFRB's recent order to partially grant Grab's motion for reconsideration--by reversing and setting aside its earlier direction to reimburse fares due to lack of legal basis--is a welcomed outcome that we are grateful for, and supports the fact that Grab acted in good faith and did not do anything illegal," said Cu in a statement.

They also maintained that they have followed the DOTr order 2015-011 that allowed them to set their own fares with oversight from the LTFRB at that time.

Grab Philippines also also lashed out at Rep. Jericho Nograles, saying that the suspension of the fare component was triggered by the complaint filed by the lawmaker.

"It is also important to note that Rep. Jericho Nograles, who filed the complaint that triggered the suspension of said fare component, read on record in a Technical Working Group hearing at the House of Representatives, that his own bill allows TNCs to set their own fares," Grab Philippines said in its statement. "This is a complete reversal of his previous accusations that TNCs could not set their own fares. He now aligns himself to the very Department Order that Grab legally obeyed."

Further, the TNC also said that it will exhaust all administrative and legal measures until the decision is overturned or resolved with finality.

Moreover, Grab said that its partner drivers have been severely affected during the last four months because of the suspension of the PHP2-per-minute fare component.

"This has forced a number of them to stop driving which, in turn, gravely affected the supply situation. Thus, the lifting of the suspension of the PHP2 per minute fare component will make our TNVS partners see a path towards more sustainable income and will help end the wait for passengers who deserve a ride when and where it is needed."

EDITOR'S NOTE: Despite the reversal of its previous ruling and finally allowing TNC's to add a PHP2/minute travel charge, the LTFRB will reportedly still pursue its pending cases with Grab and Hype Transport "for imposing the charges without authority, according to PhilStar.com. The news outlet also reported that the LTFRB has reversed its ruling requiring Grab Philippines to reimburse the PHP2-per-minute fee it charged passengers from June 2017 to April 2018.