FRANCHISE CONTROL

A related issue is the franchise control policy of LTFRB. It limits or puts a cap to total number of cars available for ridesharing platforms.

When Uber exited the region last April, it had 19,000 drivers in the Philippines but only 11,000 were absorbed by Grab because LTFRB did not accredit the remaining 8,000. This alone created a huge backlog in terms of getting rides.

If the LTFRB removes its franchise control policy, at least 10,000 new drivers and cars would be on the road.

That decision will help entrepreneurship and allow Filipino workers abroad to finally stay at home with their families. The graph can also apply here. No franchise control means the supply of cars will be at Qm and passengers and drivers can “meet” at point A. With franchise control, the supply of vehicles will be at Qc and the supply curve moves from S1 to S2.

Passengers will have longer waiting times under S2 and some will take other transportation services like regular taxi and multiple rides. So passenger demand will move from D1 to D2. The shift from Qm to Qc means more inconvenience, more unsafe passengers even if they have the extra money to pay for higher fares.

If government via LTFRB is sincere in helping the public get “safe, convenient, affordable rides,” it should remove its fare control and franchise control policies.

If LTFRB officials are retiring soon, they should aspire for goodwill from the passengers and ridesharing companies they are regulating. Retiring with ill will from the public is not a good way to leave.