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Manila Taxis May Soon Charge Higher Fares That Match Ride-Hailing Apps’ Tariffs. Will Better Service Follow Suit?

LTFRB starts re-calibrating meters of taxis in Metro Manila to reflect fare hikes approved in 2017
By Elyssa Christine Lopez |

 

 

After a delay lasting all of seven months, the Land Transportation Franchising and Regulatory Board (LTFRB) finally started re-calibrating meters of taxicabs operating in Metro Manila on July 31 to reflect higher fares approved way back in November 2017.  The process was originally scheduled to begin in December 2017 and completed by April 2018.

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This means that taxis with new meter seals may now start charging the new and higher fares that the cab operators and drivers have been asking for since 2014.

 

According to Memorandum Circular No. 2017-026, the LTFRB kept the taxis’ base fare at Php40 but allowed them to increase the distance component of their fares by almost 16 percent from Php3.50 per 300 meters to Php4.05. It also gave them permission to raise the time component of the fare by 14.3 percent from Php3.50 every two minutes to Php4.

 

The actual impact of taxi fare increase may go beyond the 14 to 16 percent hike in two fare components, however. The LTFRB also allowed the taxis to apply the time component to the entire duration of the trip. Before, it only kicked in when the vehicle was waiting or stalled in traffic, which is generally assumed to be 60 percent of the time, according to industry sources. The new mechanism follows the same scheme used by transport network companies.

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Calculations made by Entrepreneur Philippines show that for a typical 12-kilometer trip lasting an hour, the entire fare could go up by around 33 percent from Php240 to Php318. The calculations show that most of the increase came from the time component of the taxi fare. (See infographic)

 

The resulting higher taxi fares are at par or even exceed fares charged by Grab, the country’s biggest ride-hailing service provider. If there is no surge pricing, a similar 12-kilometer, one-hour trip using Grab Car would cost only from Php160 to Php208, depending on the location, at present when the LTFRB froze the time component of the fare. If the time component is added back in, the cost would range from Php280 to Php328.

 

With surge pricing, which could easily double fares, the costs could range from Php280 to Php376 without the time component, and from Php520 to Php616 with the time component.

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Meanwhile, using the same assumptions, Grab Taxi rides could rise by 22 to 27 percent, or from Php290 to 360 at present to Php368 to 438 with the higher fares approved by LTFRB.

 

But the higher taxi fares come with a number of tough conditions as the LTFRB also wants cabs to upgrade and modernize.

 

According to the circular, before taxis can re-calibrate their meters and charge higher fares, they must be equipped with the following: a GNSS (Global Navigation Satellite System) receiver, a CCTV with a recording capacity of 72 hours and a dashboard camera. In line with the government’s PUV (Public Utility Vehicle) Modernization program, cabs must also provide free Wi-Fi to passengers and must belong to a mobile cab-hailing platform.

 

The cost of the extra equipment and devices required by the LTFRB may be putting off some taxi operators from having their meters adjusted, however.

 

According to LTFRB Technical Division Chief Joel Bolano, only a few taxis so far have applied for meter recalibration and paid the corresponding fee of Php1,200 per unit. Only 129 taxis got new seals for their meters in the first three days since LTFRB began the process.

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“I’m not sure why no one is paying [the recalibration fees],” Bolano said. “But we aren’t imposing penalties for now. We just don’t want them to cram on the last day that’s why we’re making it available as early as July.”

 

 

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

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