Regulating motorcycle taxis

By ROBERT SIY, Manila Times, 25 Jan 2020

THE regulation of motorcycle taxis in the Philippines has seen many twists and turns in the past few months, with each move raising questions from legislators, transport experts and the riding public. Last May, a single transport network company (TNC), Angkas, was authorized by the Land Transportation Franchising and Regulatory Board (LTFRB) to participate in a six-month pilot motorcycle taxi study with a ceiling of 27,000 drivers for both Metro Manila and Cebu. There was concern then that choosing a single firm would create an undesirable monopoly.

While stakeholder groups pushed for legislation allowing these taxis to operate as a public transport service, a LTRFB technical working group announced on Dec. 20, 2019 that there would be a new ceiling of 30,000 riders for Metro Manila, to be split equally among three operators — Angkas, Joyride and MoveIt.

On December 29, LTFRB officials announced that the study would end on March 23, 2020 and that motorcycle taxis operating beyond that date would be considered illegal, with riders to be arrested. On January 20, the agency declared that the study would no longer proceed effective January 27, sending shockwaves through the industry. After an uproar from stakeholders, a compromise was worked out, with the ceiling on riders for Metro Manila raised to 45,000 riders and each TNC having a cap of 15,000 riders.

The roller-coaster sequence of events highlights the lack of a clear policy and vision for the motorcycle taxi industry. Without guiding principles to protect passengers and shape the industry’s development, directionless regulation can end up doing more harm than good, easily bending to political pressure and influence from various directions.

We need to be clear on why motorcycle taxis should be permitted to operate at this time and why regulating them properly is important. Normally, motorcycles would not be used as public transport because of their generally poor safety record. But in most urban and rural areas, many Filipinos have no choice but to use motorcycle taxis (habal-habal) because of the insufficiency of public transport services. To bar their operation is to deny many Filipinos their right to mobility.

If we brand motorcycle taxis as illegal, we force their services to proliferate in an unregulated fashion, as they do today. If we subject them to proper regulation and technical standards, we have a chance at modernizing their operations and improving their safety record. At the same time, the government should focus on increasing the supply, safety and quality of other public transport modes, thereby reducing eventually the need to rely on motorcycle taxis as a means of transportation.

Because motorcycle taxi services are of public interest today, we need to ensure that there is no legal impediment to their operations under proper regulation. Some lawyers believe that a Department of Transportation order is enough to regularize or legitimize their operations. But if a law is required to sustain these operations now, then this should be among our legislative priorities.

What kind of regulatory framework is required for motorcycle taxis? First of all, regulations should provide clear service, safety and technical standards for their operations. This should include rigorous training and certification of drivers, proper maintenance of units, and use of safety equipment. Given the risks of using a motorcycle, both drivers and passengers should have full insurance cover in case of any collision. To be qualified to operate as a TNC (i.e., the equivalent of Grab or Angkas), a firm should be able to demonstrate its capacity to ensure adherence to all technical, operational and safety standards.

Second, it is important for a competitive market to operate. There should be open entry and exit into the motorcycle taxi industry for firms that meet qualification requirements.

This also implies that there should not be any predetermined ceiling on the number of motorcycle taxis in operation or transport network companies managing their operations.

In line with fostering a competitive market for motorcycle taxi services, there should be no cap on the pricing for motorcycle taxis, including surge prices. However, each firm should provide on its website or app its average revenue per passenger and average revenue per kilometer for the previous week, broken down for peak and off-peak hours. This data would enable passengers to make informed choices based on the most recent historical information on the pricing of the different companies.

Going forward, it would be highly desirable for the government to organize a common app to enable prospective riders to compare in real time the costs and prices among competing motorcycle taxi TNCs prior to booking their ride (all motorcycle taxi firms would be obligated to participate in the common app).

The common app could be developed as a joint venture or public-private partnership project. Government involvement in the app would give it access to the operational data of motorcycle taxis and the government would be able to use it for transport planning purposes.

In summary, it is important that (i) motorcycle taxi services are not disrupted; (ii) if deemed necessary, Congress should pass a law defining the regulatory framework for motorcycle taxis; and (iii) the regulatory framework for them should allow competitive markets to operate, rather than impose, a restrictive approach that constrains the availability of the services.

At the same time, the government should to stay focused on improving bus and jeepney services and expanding our rail systems, so that, one day, motorcycle taxis would no longer be favored by commuters.