THE Philippines is the latest addition to the challenges that ride-sharing service companies are facing in the world, as the local transportation regulatory board rallied to disrupt the disruptors of the local transportation sector.
Ride-sharing companies are part of what modern economists call the sharing economy. Scandinavian researchers Juho Hamari, Mimmi Sjöklint and Antti Ukkonen in a paper described sharing economy as a broad term often used to refer to a hybrid market model of peer-to-peer exchange. Such transactions are often facilitated via community-basedonline services.
Other terms are shareconomy, collaborative consumption or peer economy. Uberization is also an alternative name for the phenomenon, a homage to the impact that Uber had created in its existence.
The current scenario that both Grab and Uber are up against is nothing new having been met with strong (and sometimes violent) opposition in other continents, mostly by traditional taxi companies who feel like their toes have been stepped on and government regulators struggling to embrace the disruptive impact of this revolutionary business concept.
Singapore, Taiwan and other developed Asian nations have tightened their belts to regulate companies like Grab and Uber, as they would traditional public-utility vehicles (PUVs), in order to ensure safety and accountability to the service, as well as strike a balance with the already existing public-transport sector, particularly taxis.
Despite being an early adopter of the sharing economy, Singapore would be a good case study as it scrambles to both encourage disruptive business models and keep them in line.
Its new rules allow Singaporean transportation officials to suspend a ride-sharing company for up to one month if their drivers get caught without a proper license or insurance after three or more instances. The drivers themselves face separate penalties and jail time.
Meanwhile, with much closer proximity to the Philippines, ride-sharing companies are facing much bigger challenges in Taiwan. First, the government considers it illegal because it is registered as a technology company and not a transport business—misrepresenting its service.
Another is that it disrupted the very mature and highly organized taxi market, hurting their income by as much as 30 percent according to the Taipei City Taxi Passenger Transport Trade Association.
The BBC reported earlier this year that their government clarified that it has no problem with ride-sharing companies providing services, as long as it agrees to be regulated, insured and taxed like other taxi service providers.
In the report, Uber says it’s only a platform provider and if any disputes, accidents or problems happen, it doesn’t take any responsibility. Taiwan’s government argues that providing transportation services require companies to take this responsibility.
It resulted in a two-month suspension (from February to March of 2017) and hefty fines amounting to almost $800 million, but the ride-sharing firm struck a middle ground with the Taiwanese government when it agreed to be supervised and partnered itself with licensed transport companies.
There are many similar storylines for ride-sharing companies, especially Uber, in other continents and have resulted in a shut down, like in Denmark or Hungary, because of new taxi laws mainly rooting from how it should be regulated: as a transport service or a digital platform provider.
In the Philippines, however, the Land Transportation Franchising and Regulatory Board (LTFRB) is, perhaps, seeking to tame the disruptive impact of ride-sharing companies not only in the market, but also in the realm of regulation.
But the resulting scenario urged the technologically savvy commuting public to wage war against officials of the LTFRB as it gave a July 26 ultimatum on non-LTFRB-accredited drivers that roughly translate to 90 percent of the ride-sharing services’ fleet.
It certainly would not take a genius to see the challenges and perils commuters face. To commuters, taking away Uber and Grab would most certainly mean like robbing the public of a silver lining in the daily commute—a decent, well-maintained and self-regulating transport system.
I hope that our transport officials and ride-sharing companies quickly resolve this matter, since the latter offers the safety and convenience absent in most of our obsolete and dilapidated mass transport systems.
One of the harshest realities transport officials have to gravely consider is this: The Philippines, unlike its progressive Asian neighbors Taiwan and Singapore, does not have a safe, reliable, comprehensive and convenient mass public transport system.
To reach the writer, e-mail cecilio.arillo@gmail.com.