From Grab to grabe

If you’re a Grab user or customer, enjoy the service this weekend because come Monday June 10, an estimated 8,000 Grab units will be delisted from Grab’s ride hailing platform. That will result to 80,000 rides that won’t be booked, drivers losing jobs, and enterprising Filipinos losing their only means of paying for vehicles they bought to use as Grab rides. In the trickle down effect this will also result in banks ending up with more repossessed vehicles than they would care to have and maintain. It also means lost revenues for the LTO, LTFRB, and the BIR. 

According to Atty. Jenika Hosaka, official spokesperson of Grab Philippines, the ride hailing company has no choice but to delist the said units because LTFRB rules require said units to have CPCs or Certificate of Public Conveyance a.k.a a franchise, without which Grab would end up doing business with “colorum” vehicles. The irony of it all is that the LTFRB’s requirements and process for applying for CPCs is at the root of the problem, according to many drivers I have interviewed, and this problem was confirmed by Atty. Hosaka. 

If you decide to apply to be a Grab driver/owner, you of course need to have a vehicle that is relatively new and this would be less than five years old or passes the Motor Vehicle Inspection System or MVIS of the LTO. More than 80 percent of Grab vehicles turn out to be acquired through a five-year bank loan, so most of them are new. The first injustice to enterprising Filipinos is that many banks automatically reduce the five-year term down to three years if they learn that the vehicle will be used for ride sharing. For those on a five-year plan the reduction in length of payment means an added P8,000 to P10,000 on top of the average P18,000 to P25,000 monthly installments depending on the car model. This discriminatory and self-serving practice amounts to taking away what could be part of the monthly take home pay of the driver.

Once the vehicle owner applies for a CPC, he or she is required to submit a statement of  “bank conformity” where the bank gives its approval for use of the vehicle for commercial purposes. One complication is if a third party takes over the vehicle and assumes the balance or if a relative gives the unit to a poorer relation so they have a means of livelihood. The LTFRB won’t honor a simple deed of sale and insists that the vehicle should be registered in the name of the applicant. Problem is the banks often don’t want the complication of transferring the transaction to a third party. The LTFRB also requires a certificate that the applicant has the capacity to undertake the operation of a ride sharing vehicle. This means a bank certificate that you have an account with sufficient funds! Exactly how much is sufficient proof of capacity? After that the LTFRB requires a certificate that they have a garage for the vehicle. Talk about discrimination! You target the Grab applicant while the rest of the car owning population park vehicles on the street. It turns out that most applicants who apply for the franchise are people doing it as a means of livelihood. They are not rich, middle or upper class people with houses and garages, mostly tenants in apartments or low cost condominiums. The law for such requirement has yet to be signed by the President, but the LTFRB already pre-empted matters.

If you compare Grab applicants to tricycle owners, the LTFRB has extremely complicated and filled their process with red tape. Tricycles charge more in comparison, are very unsafe vehicles and uncomfortable. The units are cheap and the regulation of vehicles and drivers are absurdly baseline minimum and of course there are hundreds of thousands if not millions of them all over the Philippines. There is no MVIS requirement, no bank mumbo-jumbo, no garage requirement or certificate of financial capacity. And yet they are all over the place!

For a ride sharing CPC you need the bank approvals and documents, you need NBI and PNP clearance, DTI registration for single proprietorship, professional license for drivers, land title as proof of ownership of land and house with a garage  or at least a rental contract and presumably a barangay certificate that you have a garage. Then you will have to hire a lawyer to represent and submit your application. On top of that, you, the vehicle owner/ applicant must make a personal appearance for every application submitted. This last item has been a sore point for many applicants and current Grab owners several of whom are business owners or managers or employees who have full time concerns and can’t leave work to repeatedly appear before LTFRB. Many owner/drivers are effectively moonlighting/sharing their vehicles as an added income to pay for their car payments during off hours. I know of a driver who actually lost his job because the vehicle owner got fed up with having to appear before LTFRB and then reappear every three months for hearings because if you don’t get to finish your business at the LTFRB, the next hearing takes two to three months to get a schedule.

In fact several drivers I’ve rode with suspect the LTFRB of making a lot of money issuing PAs or Provisional Authority slips to applicants. The PA allows you to drive the vehicle for three months only and after that you need to reapply while your CPC remains pending or in limbo because the LTFRB is under staffed and backward in document processing. Clearly, the LTFRB has failed in curbing red tape and it has resulted in “criminalizing” applicants and come Monday punishing Grab riders. What’s worse, LTFRB wants to hail Grab to a hearing to explain why they are following the rules of the LTFRB. Wow! That’s so Grabe!

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