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Why Did LTFRB Suspend Uber PH?

LTFRB cites Uber’s activation of vehicles after July 26 order banning it from doing so
By Elyssa Christine Lopez |


 

 

UPDATE: Uber Philippines released a statement on August 15 saying that it has filed a motion for reconsideration with the LTFRB. The company said that their operations will continue pending the resolution of the motion. Following the filing, services of the transport network service resumed. "We are looking forward to urgently resolving this matter with LTFRB in the interests of everyone who depends on Uber every day," the company said. 

 

However, LTFRB Spokesperson Aileen Lizada clarified in a press conference that the agency's order for suspension still stands and Uber partners caught accepting passengers will be apprehended.

 

“We will push this message to MMDA, LTO, HPG, and LTFRB: Uber is online again. Let us apprehend them,” Lizada said. “Where is your [Uber] business etiquette? What are you trying to prove?”

 

The board said apprehended drivers will face Php120,000 worth of penalty and a three-month long impoundment for their cars. 


 

The Land Transportation Franchising & Regulatory Board (LTFRB) ordered the suspension of Uber System Inc.’s operations for a month on Monday, August 14. The agency announced the suspension in an advisory posted on its social media accounts.

 

 

The order takes effect immediately, said LTFRB. It issued copies of the suspension order to the Metro Manila Development Authority (MMDA), Highway Patrol Group-Philippine National Police, Land Transportation Office, and all other concerned agencies.

 

 

“The board meted out the penalty of one-month suspension on the accreditation of Uber System Inc. and was ordered to cease and desist its operation of their online booking application during the period of suspension,” LTFRB’s advisory read. The license of Uber as a Transportation Network Company (TNC) was slated for renewal this August.

 

 

The one-month suspension stemmed from a show-cause order issued by LTFRB to Uber for allegedly violating the board’s directive issued on July 26, 2017, “prohibiting the further acceptance of additional Transport Network Vehicle Service (TNVS) and/or activation of accounts.”

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LTFRB alleged that Uber violated the July 26, 2017 directive because it continued to accept as well as activate new TNVS accounts. It cited a post in Uber’s Twitter account admitting that “applications for vehicles are being accepted but not processed.” It also alleged that Uber activated at least three vehicles on July 27, 2017. One of those vehicles was even registered in the name of the board, LTFRB said.

 

 

“The latest irresponsible act of the Respondent USI is not about pushing innovation in the context of fair regulation, but it is about unduly challenging the limit of fair regulation to continue to engage in business in this country,” the LTFRB said in a four-page order uploaded by ABS-CBN News.

 

 

The advisory follows the month-long series of talks between TNC operators and the government on the definitive policies of their operations. In July, the LTFRB imposed a Php5-million fine each on Uber and Grab Philippines for continuously accepting new drivers to its platforms even after it issued an order in July 2016 suspending the processing of applications for Transport Network Vehicle Service (TNVS) permits.

 

 

LTFRB’s latest advisory also said that it has recommended Uber to “extend financial assistance to its affected peer-operators during the period of suspension.”

 

 

“Their accredited peer operators would not have suffered the current predicament were it not for the predatory actions of respondent Uber,” the advisory read.

 

 

In a hearing in the House of Representatives earlier this month, Uber said it had around 66,000 partners (or drivers) who have taken at least one trip in the past year.

 

 

In statement, Uber said it received the order at around 6 p.m. and that they are studying it. “We will update our riders and drivers as soon as we can,” the company said.

 

 

In 2015, Uber Philippines reported a net income of Php5.9 million, almost four times the previous year's level, its financial statements submitted to the Securities and Exchange Commission showed. While it raked in Php218.4 million from sale of services, the ride-sharing app company’s costs and expenses amounted to Php204.9 million, of which the biggest item is Php72.5 million representing the cost of mobile devices, fees and accessories.

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Elyssa Christine Lopez is a staff writer of Entrepreneur PH. Follow her on Twitter @elyssalopz

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