MANILA, Philippines (3rd UPDATE) – The Department of Transportation (DOTr) on Monday, June 11, signed an order giving the Land Transportation Franchising and Regulatory Board (LTFRB) full authority over the regulation of ride-hailing companies.

The unnumbered department order (DO) subjects transport network companies (TNCs) and operators of transport network vehicle services (TNVS) to the “full regulation and supervision” of the LTFRB.

Under the order, which took effect immediately, the LTFRB was given the authority to issue or suspend franchises, set fares, determine operating conditions, and impose fines.

The previous DO 2017-11 and DO 2015-11 only gave the LTFRB oversight functions over fare setting.

DO 2017-11 stated that there would be a “pre-arranged fare as authorized by the LTFRB,” while DO 2015-11 gave TNCs the right to “set fares, subject to LTFRB’s oversight.”

These provisions of the DO were in question when ride-hailing company Grab Philippines changed its fare scheme on its own. (READ: Did Grab ‘illegally’ charge its riders higher fare?)

Now, under the newly-signed DO, the LTFRB will determine the fare scheme of ride-hailing companies through “public hearings or consultations.”

“The fare for the TNVS shall be determined by the LTFRB, after public hearing or in consultation with the TNCs and TNVS,” the DO states.

It also reminds ride-hailing companies and operators to comply with all laws, particularly the law governing common carriers.

“Any violation or non-compliance by TNCs and TNVS are grounds for imposition of fines, suspension, and cancellation of accreditation, subject to notice and hearing,” states the DO.

Grab to ‘comply’

In response, Grab Philippines head Brian Cu said that they have yet to receive a copy of the order, but that they will comply “as always.”

Cu added that the DO “strengthens” Grab’s position that the P2-per-minute travel charge it added on its own is “legal.”

“Since DO 2015-011, Grab has faithfully complied with the framework and the requirements imposed upon us by DOTr and the LTFRB,” he said.

While Grab believes the DO “strengthens” the legality of its P2-per-minute travel charge, PBA Representative Jericho Nograles thinks otherwise.

“It is very clear that TNCs cannot set their own fares like all other land transport systems…. I hope that this is clear to all TNCs that the law should be followed,” Nograles said.

For Transportation Secretary Arthur Tugade, the new order “will benefit” both the companies and the customers.

“Kaya mahalaga na may regulasyon, para nababantayan at nasisiguro natin na walang naaagrabyado…. Siyempre, gusto natin patas ang playing field at patas ang kompetisyon,” Tugade said.

(That’s why regulation is important, so we can monitor and make sure that no one is taken advantage of…. Of course, we want a level playing field and fair competition.)

LTFRB Chairman Martin Delgra III said the Board has been engaging with ride-hailing companies more often than other public utility vehicles.

“It is because we see their value, and because we believe that if done right, they will make a big difference and our commuters will ultimately benefit,” Delgra said.

The DO is the department’s latest attempt in a bid to regulate ride-hailing firms.

The LTFRB recently approved 5 new companies that would challenge Grab, but most have yet to be operational in Metro Manila. (READ: How much are the fares of new ride-hailing apps?)

Grab still dominates the Philippine ride-hailing market after the exit of Uber last April. – Rappler.com