Clueless politicians

This is a continuation from last Friday’s Commonsense that left a hanging question on the policy direction of the Land Transportation Franchising and Regulatory Board (LTFRB) over the growing number of ride-hailing companies.  Amid the reported shortage of transport network vehicle service (TNVS), why is the LTFRB seemed to be oblivious of the situation by setting a cap but allowing more transport network companies (TNC) to operate?

Accrediting more ride-hailing companies – or TNCs – sounds like a solution. But even if we put in more Ubers and Grabs, we still won’t have enough drivers and vehicles because LTFRB apparently is not looking at this.  It is the obvious and clear response to the problem. Somehow, however, the regulator is looking at addressing a perceived monopoly instead.

Monopoly or not, the bottom line is the public must be served. There must be enough vehicles to serve them especially with our public transport system being a mess that it is. They can accredit 100 more TNCs but if there are only so many registered vehicles to serve a growing rider demand, the problem will not go away.

After successfully breaking into the Philippine market, US ride-hailing company Uber sold its Southeast Asia operations to Singapore-based Grab – its bigger regional rival – last March. Because of the reported P2-billion amount of buy-out, the Uber-Grab deal is still undergoing review by the Philippine Competition Commission (PCC).

Last week, LTFRB gave the go-signal for the fifth taxi-hailing platform called as MiCab Systems Corp. The Filipino-owned TNC was the latest to secure accreditation, valid for two years, from the LTFRB. The other TNCs that have been accredited by the LTFRB one after the other in quick succession were taxi-hailing applications Hirna Mobility Solutions Inc. and ride-sharing companies Hype Transport Systems Inc., GoLag Inc., and Ipara Technologies and Solutions Inc.

More TNCs do not mean more vehicles and drivers. It is like more taxi companies but no new taxis and drivers. These are two different and separate processes in the ride-hailing business model.

This point came up during our Kapihan sa Manila Bay breakfast forum where we had Grab country head Brian Cu whose company seems to be at the receiving end of so many restrictions from the LTFRB. According to Cu, Grab receives 600,000 booking requests each day but there are only 35,000 vehicles available to serve the riding public.

That is the reality that struck home during our weekly Kapihan sa Manila Bay that we hold every Wednesday at Café Adriatico along Remedios Circle in Malate. There simply are not enough vehicles and drivers to serve the public. From their experience, a Grab driver averages 12 bookings per day.

So it is all optics for the government to say it is accrediting more TNCs while keeping driver numbers the same. The public will remain un-served. The riding public will continue to suffer. So expect to wait for 30 minutes or more to get a ride, if any.

And the politicians are not helping because their approach is disruptive, if not destructive.

When these politicians enter the picture, it is not always for the public interest. Elections are nearing and they need votes and resources. They “championed” the P2/minute issue and then shifted to another issue when Grab explained that TNCs were allowed to unilaterally set their fares way back in 2015 when, apparently, the government was still trying to understand the new business model.

No LTFRB approval was required then. Those were the days when the riding public was riding high. The riders were getting the kind of service they need because there were enough drivers and vehicles, and they were willing to pay the fares to keep the drivers happy.

Car-owners also started to moonlight, using their cars to serve riders. But starting this year, TNCs must formally ask LTRFB for fare adjustments. The glory days are gone. The politicians and old mindsets are taking over.

Technology is disrupting and changing the world but our regulators and politicians cannot keep up apparently. The private sector has an answer and the government has the antidote, always.

Remember? Not so long ago, we would get off the curb and onto the street to jostle for a taxi ride. We would brave sun and rain, our hands full of cargo, and then comes a decrepit car and you say “Mama, sa Fairview,” or whatever place it is you were off to. You get a shake of a head and you are back to jostling. How long did it take to get a ride? Thirty minutes? More?

Enter Uber and Grab about four years ago. Book a ride on your smart phone and in a few minutes your relatively new vehicle is right in front of you. This is even better than having your own driver. And you don’t have to feed him and pay for parking while he is waiting.

Uber is gone now. It threw in the towel partly because it was not getting the needed government support. Last year, for accepting drivers’ applications in preparation for expansion, the government suspended Uber for a month. Uber paid almost P500M in fines and driver compensation to resume operations early. But it was the public that suffered.  

We can blame everybody. But if only the LTRFB can find a way to get the 6,000 Uber vehicles that remain outside Grab’s platform, an additional 72,000 daily bookings could be served.

Grab is experiencing something similar of late. Politicians are throwing stones at Grab instead of finding ways to make it work better and serve the public better.

 Grab is doing its best to address the complaints of riders about driver behavior. But as Grab disciplines more drivers, they dismissed 500 or so for various alleged offenses – we will have fewer drivers. Riders will suffer more. Is it so hard to see what the solution is?

The first person with stature who will be able to effectively address these basic public needs can become the next President of the Republic. And the politicians, not to question their agenda, are clueless that this is what could get them the votes.