Digital disruption

Last week’s mess concerning Uber and Grab should have delivered the message that our laws, rules and regulations must keep up with the fast pace of digital disruption.

It is worrisome the top man for transportation, Art Tugade, thought Uber and Grab are taxis and should be treated as such.

Worse things can happen. Consider a hypothetical case: You can have a very sick father who needs urgent delicate surgery, but there are no trained and experienced specialists here. There is one in New York, except he is so busy he doesn’t do surgery outside of the Big Apple.

As luck would have it, the NY surgeon performs remote surgery via robotics and he has successfully done similar surgeries from his New York clinic. But you have a problem. The Professional Regulatory Commission is not sure they can allow someone who has not passed our local medical board examination to effectively treat a patient here.

And since those in the local medical profession are quite protective of their turf, someone pointed out a foreigner cannot be allowed to practice medicine here, even if remotely via robotics. Your father cannot be moved out and is not in a condition to fly to New York.

Should your father be left to die while our bureaucrats, lawyers and the local medical community argue if our existing rules on the practice of medicine apply?

Many of our laws are antiquated. The framers of our current constitution have restrictive provisions on ownership of mass media and advertising agencies because they wanted to protect our minds from unwanted foreign influences.

Then came satellite television --- HBO, CNN, etc. Digital entertainment came later allowing us to watch Netflix from our smart phone or tablet. Our constitutional provisions look pretty stupid.

Of course the digital revolution is disruptive… very disruptive.  My wife is fond of making travel arrangements via travel websites. My children abroad do all their arrangements via the internet too. I like dealing with a travel agent because I want someone to talk to if things go wrong. But I am a vanishing breed.

So many travel agencies have to reconfigure their business model in the light of this tough competition from the internet. The folks from Rajah Tours, for example, compensate by giving the added human touch which the websites are not that good at.

The Post Office is another example. It needs to justify itself in the light of e-mail. Before we got married, my wife worked in the US and daily letters kept the fires burning. 

Indeed, long distance relationships are easier to manage these days if you have an iPhone with its FaceTime feature. Grandparents get to see their grandchildren everyday, even if they are based abroad, thanks to Steve Jobs.

That’s because the phone industry has experienced the most disruption from the digital revolution. All of a sudden the plain old telephone service and its expensive long distance call no longer works. Phone companies are giving away their land line service as part of a bundle with other digital products.  

The phone business has been so disrupted that I find it difficult to understand the recent DOLE order to give permanent appointments to thousands of outsourced PLDT workers. The new business model for phone companies is still evolving and PLDT needs room to figure that out.

“We plan to transform from being legacy-driven in revenues to digital. The next three years will be challenging for PLDT,” MVP told a recent stockholders meeting. He said PLDT needs space to pivot into the digital space. He is looking at hiring “digital natives” for top positions in the company rather than “digital migrants” which people of our age are.

No one is exempted from the disruptive impact of digital technology. The taxi industry that is up in arms over Uber and Grab should try to understand that this new app has forever changed the business model they are familiar with. It is the wave of the future and they should adapt or be left behind.

And it doesn’t help that clueless bureaucrats are confused about it and betray their ignorance the way Sec. Tugade did.

Sec. Tugade defended the LTFRB on the Grab/Uber issue saying it is in “the concept and nature of a public utility.”

“Hindi ho ba nararapat lang na saklaw ng regulatory function ng LTFRB ito? We need to be assured, first and foremost, that these cabs are properly working.” Tugade said.

That’s the thing Tugade and the LTFRB lawyers do not get it. Grab and Uber are not taxis. In their draft rules for modernization of public utilities, LTFRB is requiring Uber/Grab drivers to have a minimum of 10 units when just one is alright under this ride sharing concept.

That is also partly the fault of Grab and Uber because they are getting greedy and venturing away from the ride sharing model. They have started processing drivers/units as taxi operators would.

Here is how one of my readers, Francis Paolo Tiopianco sees it:

“Just wanted to share an article I published last 2015 for the Philippine Law Journal. Basically, Uber and Grab doesn’t fall into traditional public utility classifications and it would be a mistake to shoehorn their service into one of them. But this is exactly what those at the LTFRB are doing!

“Strictly speaking, LTFRB doesn’t even have authority over Uber and Grab because they are not a “transportation service” as the term is understood under our public utility laws (Uber neither controls nor operates the vehicles), but an ‘e-hailing’ service that matches passengers and drivers. It is a value-added service that falls within the jurisdiction of the NTC and NTC has adopted a laissez faire policy on free-to-use VAS.

“LTFRB wants to regulate the drivers (called the Transportation Network Vehicle Service/TNVS) as public utilities, but it will never work (unless they plan to kill the service; in which case, they’re doing a grand job).”

That’s the problem when public officials are not up to date with developments.

Then there is the problem of our public officials being so detached from the people affected by their rules. None of them, not Tugade, not any of the LTFRB officials have ever tried to get a taxi on a Friday payday or even from NAIA late at night because they always use their private cars. They do not know how it feels and they cannot understand the public uproar.

Tugade told us before he took his oath that it is ironic he is responsible for transportation and he doesn’t even know how to drive and has never driven in his life. I didn’t think much about that at that time and even assured him it doesn’t matter.

But I was wrong. It does matter to have a transport secretary who has driven in heavy traffic in Metro Manila’s chaotic streets. It is one thing to be a passenger in a vehicle and fretting about the delay the slow moving traffic is causing. It is another thing to be behind the wheel agonizing as you constantly shift gears and dance with the clutch while also trying to avoid wayward motorcycles, pedestrians and unruly utility vehicle drivers.

If Tugade drove, he would have been more passionate in getting his emergency powers to deal with our traffic problem. If Tugade wasn’t so rich and he didn’t have a spare car to use on coding day, he would have been more understanding of the middle class users of Uber and Grab. 

Digital disruption is the name of today’s game. Our laws must keep up with technology. We can’t stop a NY surgeon using robotics from saving a patient’s life thousands of miles away in Manila. It is stupid and heartless to do so. 

Adapt or perish is the way to go, and government must lead the way.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco.