How to be Uber legal: A guide on regulations for Internet ride-sharing services

Do you use Uber or similar types of apps?  Getting a ride through web-based applications that match drivers with riders has recently become more popular than hailing a taxicab.  Perhaps the most popular is “Uber”, the pioneer for web-based ride-sharing services. 

Several taxi operators complained that Uber and similar ride-sharing services were operating illegally.  One of the grey areas was the fact that Uber and similar online services were not similar to taxi operators.  Uber only provided the platform where drivers and riders could interact.  It did not employ drivers nor operate the cars which provide transportation services to the public.

Last May, the Land Transportation Franchising and Regulatory Board (LTFRB) issued regulations which apply to Uber and similar ride-sharing services.  Starting Aug. 21, the LTFRB will apprehend unregistered online ride-sharing services or those that do not comply with LTFRB regulations.

Whether you ride or drive cars that are operated through Uber or similar online ride-sharing services, it’s time to learn about the new rules that regulate them. 

Uber = TNC, Uber Vehicles = TNVS

First, it is important to know the distinction between the web-based apps that connect drivers to riders; and the vehicles which provide the ride-sharing services to the public.

Web-based apps (like Uber) that provide ride-sharing services are classified as  “Transportation Network Companies” (TNCs).  LTFRB Memorandum Circular No. 2015-015 defines TNCs as entities that provide “pre-arranged transportation services using an internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles.” 

Those who provide the actual cars and drivers through Uber or TNCs are classified as operators of a Transportation Network Vehicle Service (TNVS), governed by LTFRB Memorandum Circular No. 2015-017. 

TNC/TNVS Regulations

How do you know if the ride-sharing service you’re using is legal?  If you are using your car to provide transportation services through Uber or similar apps, how do you become legitimate?

Here are guidelines on some primary requirements applicable to TNC and TNVS:

For TNC

•TNCs are required to obtain a Certificate of TNC Accreditation from the LTFRB.  The Certificate is valid for two years and is non-transferrable.

•TNCs must pay an accreditation fee of Ten Thousand Pesos (P10,000).

•TNCs must possess permits from other agencies such as a Business Permit, and a Certificate of Registration from the Bureau of Internal Revenue (BIR).

•TNCs must ensure that passengers can view their TNC-accredited driver’s name and photograph, vehicle’s license plate number, and the case number issued by the LTFRB on the device used to connect with the digital technology application.

•The TNC’s app must clearly display the total fare, fare range or rate by distance or time. 

•The TNC’s app must include a complaint mechanism through which passengers can submit complaints or report lost items.  The app must also include the LTFRB’s hotline number.

•TNCs are required to have a “trade dress” to enable the public to identify vehicles as associated with a particular TNC. 

•TNCs must transmit to the passenger, either by email or text message, an electronic receipt or any BIR-approved official receipt upon the completion of a pre-arranged ride.  The receipt must indicate the point of origin and destination, total distance and duration of the ride, and total fare paid.

For TNVS

•TNVS operators must obtain from the LTFRB a Certificate of Public Convenience (CPC) to Operate a TNVS.   The CPC is valid for one year.  Prior to the issuance of a CPC, a Provisional Authority which is valid for a period of 45 days may be obtained from the LTFRB.

•TNVS operators must pay a filing fee of Five Hundred Ten Pesos (P510) for for the first two vehicle units, and an additional Seventy Pesos (P70) for each additional unit.

•TNVS drivers must be accredited by a TNC, and hold a professional driver’s license.

•TNVS drivers must always display the LTFRB-prescribed ID in full view of the passenger.

•TNVS drivers must always display the TNC’s “trade dress” during the pre-arranged ride.  The trade dress may be magnetic or removable but it must be readable during daylight at a distance of at least 50 feet; and reflective, illuminated or patently visible in darkness. 

•During the pre-arranged ride, TNVS drivers must always carry an internet-connected digital device that is connected to the TNC-provided app.

•TNVS vehicles are not allowed to install toplights or taximeters.

•TNVS operators may not display advertisements on the exterior of their vehicle(s) or any component of the trade dress unless approved by the LTFRB.

•TNVS drivers are not allowed to smoke inside the vehicle.

•TNVS drivers may only carry up to the maximum designed seating capacity of the vehicle, but in no case to exceed seven passengers.

•TNVS drivers may not accept or respond to requests from passengers via street hail, hand gestures, verbal statements or phone calls. TNVS drivers may only take passengers through booking services provided by TNC-apps on an internet-connected device.

•TNVS drivers may not pick-up or drop-off passengers at designated taxi stands, no loading or unloading zones, or other restricted areas.

•TNVS drivers are prohibited from taking a circuitous or any route other than the most direct route to a destination, unless the passenger gives express consent. 

•TNVS drivers may not allow a passenger to transport or have any alcoholic beverage inside the vehicle, unless such beverage is in its original package with an unbroken seal. 

Special Rules for Airport Travel

For those traveling from the airports, take note of these special rules.  TNCs are prohibited from facilitating a pre-arranged ride to pick-up passengers in airports, unless authorized by the airport management.  TNVS drivers are also prohibited from picking-up passengers in airports unless authorized by airport management.  It seems, however, that current regulations do not prohibit pre-arranged rides using TNCs and TNVS from destination points going to the airports. 

The recently issued LTFRB regulations finally lay to rest any doubts as to the legality of internet-based ride-sharing services.  However, take note of the requirements of such regulations to ensure that what you’re using or providing is legal—be it the ride-sharing app or the transportation service vehicle.  

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Karen Jimeno is a junior partner at Jimeno Cope & David Law Firm and a law professor.  She hosts LegalHD on CNN Philippines on Tuesdays at 9:30 p.m. She graduated from UP Law School and Harvard Law School, and is licensed to practice law in the Philippines and in New York.