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DOTr halts new Uber, Grab applicants in Metro Manila

/ 12:26 PM July 22, 2016

The Department of Transportation (DOTr) launched a review of existing rules covering on-demand ride-sharing apps like Uber and Grab, halting the processing for thousands of applicants seeking to operate in Metro Manila.

The move is part of a series of studies into current policies since the Duterte administration came to power at the start of July this year. The department was also studying existing public utility franchises, Transportation Secretary Arthur Tugade said earlier this week.

DOTr spokesman Cherie Mercado said the ridesharing review was needed because of the “sheer volume of applicants.” She said the government also wanted to look into the fare scheme used by ride sharing app operators.

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Currently, the companies are allowed to dictate their rates, which they said were driven by supply and demand factors.

According to the DOTr, the review would affect about 29,000 pending applications as of July 15, 2016. Of those, 23,000 applications alone are for Uber, the popular San Francisco, United States-based car hailing app. Grab had 5,727 applications while UHOP had 131.

The review order was formalized via a memo from the Land Transportation Franchising and Regulatory Board, dated July 21, 2016. LTFRB said it would start reviewing policies on the issuance of franchises to Transportation Network Vehicle Service (TNVS) applications, which cover ridesharing apps.

READ: LTFRB member calls for limit to vehicles operating under Uber, Grab

In line with this, it ordered the “suspension of the acceptance of all TNVS applications proposing to ply on the route within Metro Manila or entering Metro Manila.”

“The technical division is directed not to accept any TNVS application upon effectivity of this circular. All regional offices are likewise not to accept TNVS applications with proposed route to operate entering Metro Manila,” the LTFRB memo added.

The DOTr was unable to immediately share figures on the existing volume of Uber, Grab and UHOP vehicles on the road.

However, Jesus “Bong” Suntay, president of the Philippine National Taxi Operators Association, which had opposed the ridesharing sector given the added competition to the traditional taxi business and unregulated fares, estimated there were about 20,000 of these vehicles on the road today.

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That compared with about 37,000 taxis nationwide, which Suntay said took about 60 years to reach against just two years for Uber and Grab.

READ: Legal questions ain’t over for Uber

“It’s the right decision to stop the issuances and review,” Suntay said in an interview. “We can coexist together with this industry, but what we’re after is a level playing field.”

The development also comes as the DOTr, along with other government agencies, move to combat the “crisis” in Metro Manila.

Ridesharing operators claimed their industry reduces road congestion since it discourages car owners from using their own vehicles or from buying cars./rga

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TAGS: Arthur Tugade, Cherie Mercado, Department of Transportation, franchise, Grab, ridesharing, ridesharing apps, traffic, transportation, Uber, UHOP
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