Uber shells out P489M to end tiff with LTFRB

By Luis Leoncio 

Transport network company (TNC) Uber Technologies paid a total of P489.24 million for the Land Transportation Franchising and Regulatory Board (LTFRB) to lift a one-month suspension. 

The LTFRB lifted its one-month suspension last Aug. 29 after the ride-hailing firm paid a fine on top of financial aid to its drivers affected by the halted operations.

The LTFRB had halted Uber’s operations for a month from Aug. 14 for violating an order to stop accepting new driver applications.

Uber paid a penalty of P190 million, almost 20 times what it had earlier offered to pay, and another P300 million as financial assistance to drivers as demanded by the regulator.

“We have complied with the requirements outlined by the LTFRB, and are grateful for the opportunity to serve the Philippines again,” Uber said in a statement.

Uber had previously offered to pay P10 million to get the suspension lifted, even as it said it did not process new applications. It recently said it had nearly 67,000 drivers.

“It cost Uber close to half a billion pesos for defying government regulations, putting at risk tens of thousands of Uber (drivers) as well as the riding public,” Aileen Lizada, LTFRB board member said.

The dearth of efficient and reliable public transport services in the Philippines has made Uber a hit with passengers.

Sen. Grace Poe blamed Uber’s suspension on “the apparent inability of the LTFRB to adjust and adapt to new technology”.

“Based on what happened, it seems that it flexes its discretion as a whimsical regulator just for the sake of imposing regulations,” Poe said in a statement.

The dispute with the LTFRB was the latest setback this year to Uber.

The San Francisco-based company has been embroiled in a number of controversies elsewhere including allegations of sexual harassment, a lawsuit alleging trade-secrets theft and a federal criminal probe over its use of software to evade city regulators, among other alleged misconduct.

The fine will be remitted to the National Treasury.

It has also received a certification from the ridesharing firm’s bank Wells Fargo that it has provided financial assistance worth PHP299.24 million to its 36,367 transport network vehicle services (TNVS) operators nationwide affected during the suspension from August 15 to 29, 2017.

“Wherefore, in view of the submission of proof by Uber, the one month suspension on the accreditation dated August 14, 2017 is hereby lifted and set aside subject to further verification of actual receipt by the TNVS peer operators of the amount due to each of them,” Lizada said.

In its order dated August 25, LTFRB explained that the amount of the fine was based on Uber’s daily average earnings and the number of days it has been suspended. According to LTFRB, Uber’s daily income ranges from P7 million to P10 million with a daily ridership of at least 150,000 trips.

Uber promised not to pass on to commuters the fine it paid. Lizada said that the ridesharing firm has committed to issue a statement that it will not pass on the cost of the fine during a technical working group meeting with transportation network companies (TNCs).

Transportation network companies (TNCs) also agreed to provide comprehensive insurance coverage to commuters.

Lizada said Uber and its competitor Grab have agreed, during its technical working group meeting to comply with its memorandum circular providing for an enhanced personal accident insurance program.

“We directed TNCs to provide insurance coverage the same as LTFRB is providing extensive coverage and all risk policy. We asked both Uber and Grab to improve the coverage that their TNVS (transport network vehicle services) should be having,” Lizada said.

The LTFRB has partnered with the Passenger Accident Management and Insurance Agency Inc. (PAMI) and SCCI Management and Insurance Agency Corporation (SCCI) for its insurance coverage.

Under LTFRB Memorandum Circular 2015-028, passengers of public utility vehicles are entitled to monetary benefits from P3,000 to P200,000 including accidental death and other injuries.

Usually, only TNVS units with provisional authority (PA) and certificate of public convenience (CPC) have government-mandated PAMI coverage since these are recognized by the LTFRB to have legitimate operations.

Grab’s insurance policy mandates that those without PA or CPC should be enrolled to an insurance premium while those with PAs/CPCs get the same on top of PAMI.

As such, all TNVS drivers accredited by Grab are covered by insurance and passengers can settle claims against the ridesharing firm.