Nobody likes red tape. Well, almost nobody. We reckon there are plenty of fixers out there with business models that rely almost entirely on its existence. But yeah, you get the point.
Now, imagine that a single piece of red tape is what stands between you and maintaining your livelihood. This is the dilemma countless ride-hailing drivers in the Philippines are facing.
During a recent roundtable discussion with Grab Philippines, the company shared that a whopping 80% of all rejected applications are because of a single requirement: The certificate of conformity (COC) the government requires transport network vehicle service (TNVS) franchise applicants to obtain from their banks.
Required for new TNVS applicants since 2019, a COC is essentially proof that the bank financing your car loan is allowing you to use your unit as a ride-hailing vehicle.
OTHER STORIES YOU IMGHT HAVE MISSED:
MG ZS T vs. Geely Coolray Sport: Which is the better subcompact crossover?
Will the next-gen Toyota Innova be called ‘Zenix’ in PH?
The problem here is that local banks are giving TNVS applicants a hard time. The process of getting a COC is tedious, slow, and can cost applicants upwards of P15,000. In some situations, banks also require applicants to restructure their car loans in order to fulfill the requirement.
Apparently, the reasoning is that using units as ride-hailing vehicles will take a toll on their roadworthiness. This means that in case the unit must be repossessed, its value will be lower.
Now, you can’t exactly fault a bank for looking after its own interests—especially considering countless ride-hailing units needed to be repossessed after COVID-19 decimated the industry in 2020. But there has to be a middle ground, right? Grab said that it has already approached banks regarding the loosening of this requirement.
This is just one of the many roadblocks the ride-hailing industry needs to address if it hopes to fill all of the 100,000 franchise license slots the LTFRB recently gave its go-signal. Let’s see how this situation pans out.
