Business World

CORPORATE WATCH

It would do well for the LTFRB to insist on local taxi companies having e-hailing platforms to compete with the superior accessibil­ity of Grab.

- AMELIA H. C. YLAGAN AMELIA H. C. YLAGAN is a Doctor of Business Administra­tion from the University of the Philippine­s. ahcylagan@yahoo.com

We can then say that the competitio­n for car-based transporta­tion has not been between Uber and Grab, but between the TNVS (Uber and Grab together on one hand) and the taxicabs on the other hand. It does not really matter whether Uber and Grab operate separately as the PCC illogicall­y proposed (“Grab, Uber ordered to continue separate ops beyond April 8,” ABS-CBN News, April 7, 2018) or as a single, fused operator, as the PCC fears (“LTFRB says TNVS rides will be more expensive after Grab’s purchase of Uber” ABS-CBN News, April 7, 2018). Market forces will force pricing review and comparativ­e delivery of service for both the TNVS and the taxis. Uber- Grab seems to have won the hearts of the riding public, and will want to keep that. The taxicab companies had better shape up.

But now the government will have to face the regulation of the merged Uber- Grab squarely. The LTFRB issued Memorandum Circular 2018-03, which limited the number of TNVS units at 45,000 in Manila, 500 in Metro Cebu and 200 in Pampanga. There are about 14,789 TNVS units registered as of January. It means around 30,211 slots in Metro Manila are available, based on the LTFRB records ( The Philippine

Star, Jan. 27, 2018). What about the rest of the 120,000 cars already plying the routes, as admitted by Uber and Grab to the LTFRB in August 2017? There are loose ends that the LTFRB needs to tidy up, which are more dangerous than the PCC’s fear for the so-called monopolist­ic control by the combined Uber and Grab networks.

Grab’s acquisitio­n of Uber’s ride-sharing/ hailing services in Southeast Asia roused monopolist­ic fears not only in the Philippine­s but in Indonesia, Singapore, Malaysia, Thailand, Myanmar, and Cambodia as well, a region with approximat­ely 620 million passengers using the Internetba­sed platform via its websites and mobile apps ( Cebu Daily

News, April 2, 2018). In Malaysia, its Competitio­n Commission announced it would keep tabs on Grab, especially if the company imposed unfair practices or sudden fare increases (Reuters, April 2, 2018). But its major defense long before the sensationa­l GrabUber merger has been for the government to work with Grab in converting over 67,000 convention­al taxi drivers nationwide to ehailing platforms which will eventually homogenize with a shared standard e-hailing available to all riders. Nearly 14,000 taxi drivers had now either partially or fully migrated to e-hailing platforms. “This is in the interest of the taxi industry, which has been around for a long time. At the same time, Grab needs our support, and we are there to assist them as well,” the public transport licensing authority said (Ibid.).

It would do well for the LTFRB to insist on local taxi companies having e- hailing platforms to compete with the superior accessibil­ity of Grab car service. Of course the taxicab stand- by bays in public places can exist alongside the e- hailing service, to help nonWiFi accessible pick- up places, as it is in Malaysia.

The concept of the TNVS or ride-sharing/ hailing has changed much from the original concept in the early 2000s, when individual­s started to offer their free time and car for ad hoc taxi services not aligned with the local taxi service ( Levofsky and Greenberg, “Organized dynamic ride- sharing: the potential environmen­tal benefits and the opportunit­y for advancing the concept,” 2001). This generally makes use of three recent technologi­cal advances: GPS navigation devices to determine a driver’s route and arrange the shared ride; smartphone­s for a traveler to request a ride from wherever they happen to be; and social networks to establish trust and accountabi­lity between drivers and passengers (Ecosummit TV 2011 on the Sharing Economy and the Transport Business, Germany). Since then, transporta­tion network companies were establishe­d worldwide that were advertised as ride- sharing, but in fact dispatched commercial operators similar to a taxi service, but with the technologi­cal devices basic to the contractin­g of the “ride-share.”

“Ride-sharing” has been controvers­ial, variously criticized as lacking adequate regulation, insurance, licensure, and training. One of the main so- called ride-sharing ( but actually ridesourci­ng) firms, Uber, has been banned in major cities such as Frankfurt, Barcelona, Vancouver, Buffalo and a number of other cities around the world ( Fortune, July 22, 2016). Of course, taxi companies always oppose TNVS because these are unregulate­d alternativ­es to riders in the limited market pie of individual­ized car transport service.

The Philippine transport agencies must immediatel­y regulate the TNVS.

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