This tells you everything you need to know about Uber and Premium Taxi

Finally, someone explains it for LTFRB
by Vernon B. Sarne | Aug 15, 2015

Uber Manila

We need to write this very carefully lest we appear like we're throwing a competitor under the bus. But this seriously needs to be read by everyone who has a modicum of interest in the ongoing saga regarding the Land Transportation Franchising and Regulatory Board's campaign to legitimize app-based ride services like Uber and GrabCar.

In a nutshell, the LTFRB announced in May that it was finally regulating Transport Network Companies that use the app-based business model, the most popular of which is Uber. While it was easy to dismiss this announcement as just another way the Philippine government was looking to get its piece of the pie, it was really no big deal to us. The bottom line is this: Uber and its ilk need to be regulated so that they can pay taxes that rightfully belong to the government. Vilify our government all you want, but everyone needs to pay taxes, period.

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But then it seemed some businesses that didn't want to be taxed or regulated used (and really abused, shame on them) public sympathy to try and paint the LTFRB's move as evil, greedy and anti-people. Worse, some media practitioners who either didn't understand the issue or were merely in it for the virality took up the cudgels for these companies and led an almost systematic campaign to revile the LTFRB.

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Now, don't get us wrong: We're not exactly fans of the LTFRB. We constantly criticize them for the way they indiscriminately grant permits to public-utility transport providers at the expense of public safety (see dilapidated jeepneys and buses). But on this issue of legitimizing app-based ride services, we say the government has every right to do so. If a security guard pays his taxes, why shouldn't an Uber operator pay his?

And so we refused to be used by companies that didn't want to be regulated. Why should we help them do business in this country without paying taxes and being regulated like everyone else?

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On August 11, lawyer Yves Gonzalez reached out to us to say that LTFRB chairman Winston Ginez wanted to talk to us regarding the Uber issue, as the agency was clearly losing in the social-media discussions. You see, it's not difficult to beat any government agency in a court of public opinion--most everyone hates the establishment to begin with. Add to the mix a popular "victim" like Uber and you have the government thrown to the ground like a Ronda Rousey casualty.

Chairman Ginez himself contacted us and gave his best effort to untangle his agency from the mess created by the disinformation launched against them.

But see, the public opinion had, by then, been so overwhelmingly won by the other side that most of our readers practically ignored what the LTFRB boss was saying, and they continued to cuss the government for its perceived greediness and total lack of concern for the common good. In fact, we were so worried we'd be accused of being a mouthpiece for the government that we posted this meme on our Facebook page. It was our way of assuring everyone that we had not crossed over to the "dark side," and that we still had the public interest in mind more than anything else.

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And then something happened.

Gonzalez--the person who gave our contact details to Ginez--finally spoke up on the issue on his Facebook page. You will recall that Gonzalez was previously the MMDA's traffic director; he is now a social-media operations strategist. He is weighing in on the issue as a regular Filipino citizen.

His post attracted replies from our colleague James Deakin, who had been the most vocal defender of Uber almost to the utter exclusion of LTFRB's side of the matter. We will post here the exchange and let you judge for yourself. As for us, we're convinced this exchange definitively, clearly and unambiguously explains everything that needs to be learned about this whole LTFRB-versus-Uber episode.

The exchange follows in italics. It's quite long but we promise you it's worth your time if you truly wish to understand the issue.

YVES GONZALEZ: If this news annoys you, please direct your anger at Uber and ask them why, after three months, they still haven't applied to be covered by what they themselves called "historic" and "progressive ride sharing regulations."

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JAMES DEAKIN: Hey Yves! On paper, it does seem like Uber and Grab have been remiss. But here's the real situation, as explained by the operators in their open letter:

YG: Hi, James. GrabCar (the company) has been able to apply and be accredited, but Uber hasn't even applied. That is a fact. The situation and confusion of the drivers is quite different. The full facts are not in a single open letter. Uber is doing what it always does globally--say one thing, do another thing. It would be different if they had actually applied, but LTFRB is giving them a different time.

JD: Perhaps, but why are the LTFRB bullying them in the media before the deadline? They have until the 20th to comply. I don't see why they are being threatened in public as early as now. It's only natural that it would invite public outrage.

YG: LTFRB gave them advance warning so they can and actually comply. The alternative would have been to stay silent and then suddenly start apprehending. Now that would have been a fiasco for sure.

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Study how Uber operates around the world and you'll know that this is their modus operandi: Get public sympathy on their side, say one thing, do another.

Why don't we ask Uber why they haven't applied properly for TNC status under the 'revolutionary' regulations they were so happy about? GrabCar immediately did. And why say LTFRB is running their 'own' taxi service when they are not? Now this falsity has spread and can no longer be put back in the bottle no matter how many errata and mea culpas are posted after. The damage has been done and misinformation has spread. This is what I find quite wrong.

JD: Appreciate the open and candid banter. But I never said they were running their own, bud. I said they were starting their own. Meaning they are creating the regulations to develop a new system altogether. I also said that the only ones they would allow to operate it would be those who bought 20 brand-new cars (now 25) which completely alienates the current operators that are making a decent, honest living out of what is a very legal service--up until Aug 20 at least.

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I talked about reinventing the wheel because they could skip all of this Premium Taxi business and just work at legitimizing a tried and proven system, which would save time, money and a lot of unwanted congestion on our roads because Uber Black and GrabCar do exactly that with existing vehicles.

I’m not sure what Uber’s MO is outside of the country, but until they break the law over here, they should not be treated like criminals. And up until August 20, they are well within their deadline. To be honest, I would find it much fairer had they kept quiet about it and communicated solely with the transport companies for compliance and then just apprehended those that violated the deadline rather than use the mass media to threaten and intimidate them.

You mentioned I could not take what I said back. Well neither can they. And now we have innocent operators having their cars illegally impounded even before the deadline just because some enforcers either don’t understand what was said or just want in on the action. And that, sir, is what I find quite wrong.

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YG: Your "starting their own" statement has pretty much been interpreted by 90% of your followers as LTFRB running it themselves. That's an understandable deduction from your statement. And it's false, as we all know. They also didn't reinvent the wheel. In fact, they have legitimized Uber-type operations as long as the TNC company applies. They have enriched the public transport regulations with new classifications. If no one wants to ride the Premium Taxis, they don't have to. They can take Uber or GrabCar. It's the consumer's choice. To demonize the Premium Taxi classification, which you did, is to jump the gun and assume that TNC is the only option that riders should have. To state that Premium Taxis are the reason LTFRB wants Uber to comply with regulations, is to put malice where there is none. In the picture now, LTFRB and drivers want the regulation to be effective. But Uber, the ball is in their court now.

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JD: Leave the ball in Uber's court. As I said in a reply to you on Twitter, if they miss the deadline and have no legitimate reason for doing so, I step off my soapbox. They had their chance. Especially if GrabCar grabbed it. With regard to how I feel about Premium Taxis, well, that is an opinion, and one I will stick to because I really do think it is not only redundant, but the model is inferior. But if people want to invest in it or take it, that is fine. It is the privilege of living in a free country.

YG: Unfortunately, James, as much as you've been right on most issues involving LTFRB in the past, you were flat-out wrong on this one, and I'm calling it as it is.

You concocted an evil government conspiracy to get rid of Uber and have an alleged government-run Premium Taxi take its place. You created this story and it's what's going around now on social media--a disinformation. When you realized this was false, you backtracked and raised different arguments (what about the partners, 2.0-liter displacement is a bad idea, it's redundant, LTFRB sucks anyway, what about the taxis), but never admitted to the fact that you were wrong to claim LTFRB is "starting their own service called Premium Taxi." The fact that the post is still up means you still stand by that story. Even CNN Philippines has already issued an erratum on this, but you have not.

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JD: I ask, then, who is starting the service if not the DOTC/LTFRB?

YG: Calling Premium Taxis LTFRB's "own service" is like saying TNCs (including Uber, if they apply), taxis, jeeps, airport shuttles, and every other franchised service are "owned" by LTFRB as well. LTFRB sets the regulation which provides for the existence of these regulated common carriers. Does NTC also "own" the telco carriers since they were the ones who issued the regulations that govern those? Does POEA "own" recruitment agencies? The fact that a regulator sets the rules out of which private entities can start a regulated business doesn't mean that the regulator "owns" those businesses. They oversee, regulate and are responsible for them. But to own them, that's definitely not correct.

On family tables this weekend, families will discuss at length how they heard LTFRB the regulator is starting its "own taxi service." And the people who know better would have a hard time explaining to them how wrong this conspiracy theory is.

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"A lie can travel halfway around the world while the truth is putting on its shoes."

JD: I see where you’re coming from, but if we are going to debate so passionately about my choice of words here between "own" service or “regulators,” then I concede. You are the lawyer after all, and I will happily edit my original post if it will put this to bed. But if we use your examples, it also means that Uber does not operate its ‘own’ service either as it does not own any cars, in the same way the LTFRB will not own or operate any of the Premium Taxis, the POEA doesn’t own recruitment agencies, and the NTC does not own Globe and Smart.

Yves, we’ve known each other for a while now, and I’ve always respected your opinion, but you also know that aside from reviewing cars, my job is to comment on issues that affect motoring. It is what I have done for the last 14 years, and I would like to believe that I have done so in the fairest way possible. Now you accuse me of concocting “an evil government conspiracy to get rid of Uber and have an alleged government-run Premium Taxi take its place” when all I ever stated was concern. I was very, very, very clear about this in my open letter to the DOTC. I said I was concerned about Premium Taxis replacing Uber or competing unevenly. Big difference.

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I apologize if that offends you or the agency, but if you look at the state of our regulated public transportation system here, I think I have every right to be concerned. We all do. And we’re also allowed to express that freely, without fear of those feelings needing to be translated into a legal dialect that pleases the government. They are feelings, after all. Try and hail a cab on a rainy day to see what I mean.

Now, what is going around on social media is a public sentiment, my friend. As flattered as I am for you thinking I’m that capable of deceiving millions of people with a single post, this is a sentiment that is born from decades of frustration watching our public transportation system deteriorate before our very eyes; buses that are literally getting away with murder, taxis that rob, rape and extort passengers, jeepneys that operate illegal terminals and break every rule know to man...I think you get the picture. So when the only thing close to a solution is threatened, like Uber and GrabCar, you cannot expect to regulate people’s reactions.

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So no, it wasn’t backtracking when I shared my personal opinion on the redundancy of a Premium Taxi service, or the logic of a minimum 2.0-liter displacement. Those were merely opinions that I am actually paid to write. You’re welcome to not agree. That is your right and I respect that. But it is also mine. Peace.

YG: Let's discuss your points per paragraph.

1. The difference between LTFRB the regulator and Uber the operator/TNC is that Uber earns a direct income from the partners that it "regulates" (controls actually). To anchor the argument on the "they don't own the cars" argument of Uber is to imply that ownership of cars is the only important factor in "owning" a common-carrier business and having accountability thereof (hence subject to regulation). The fact that (a) Uber takes a cut from all sales, (b) they can decide who is and who isn't part of the system, and (c) they control the whole ecosystem (with promos, rules, incentives to partners) makes Uber the prime player in this business (the party subject to regulation by the regulating body). The non-ownership of cars is as inconsequential as saying Uber doesn't own the Internet connection that makes the booking possible, or the fuel that burns during the trip. Those are not the crux of the matter. (But Uber PR will claim otherwise for sure as they have done so in multiple countries.) Control is a crucial element in any business, not just ownership.

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2. I agree that you have always tried to do your work in the fairest way possible. That's why this particular incident had to be called out. When you posted the "they are starting their own service called Premium Taxi, which is just another racket" post, that was unlike you, in that it was both patently inaccurate and grossly unfair to LTFRB and the public who rely on your words. We can complain about the LTFRB for all the wrong things they have done and are doing, but let's not cause public anger on them for something that isn't true. Premium Taxi is not their own service, period. CNN Philippines misreported this, too, and promptly made an erratum when they realized their mistake. CNN Philippines didn't try to argue that they were right in how they used "own"; they admitted their mistake and corrected it. Your open letter after the post clarified where you were coming from, but the misinformation, as originally stated, remained and continues to spread.

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3. No apologies to me needed as I did not get offended, but was rather alarmed. Yes, we all have the freedom of expression, but that freedom comes with an obligation to be responsible with what we say, especially when we know we have an audience that believes and acts upon our expressions. This is the reason you shouldn't shout "BOMB!" in a crowded theater. Or say that the government is gonna get into the taxi business when it is not.

Also, freedom of expression means the government cannot curtail your speech. I am not in the government. I am just a friend asking you to be more accurate with what you report. I hope this is not too much to ask.

No one is asking you to please the government, only to be fair and truthful with your words and not to cause mass confusion with wrong information. And I ask you this because I respect you as a person and friend, and that I expect this fairness and truthfulness from the James Deakin that I've known all these years.

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4. Once again, the LTFRB is not asking Uber to stop operations forever. It is asking Uber to apply to be a TNC, so that LTFRB can regulate it properly and perform its legally mandated role. LTFRB knows Uber is here to stay, but that doesn't mean LTFRB will just wait forever for Uber to comply with their promise to apply for TNC status. By LTFRB giving a deadline, it told UBER na walang forever. By telling Uber that they will start apprehending their vehicles if Uber doesn't comply with the legal requirements, LTFRB was merely reminding Uber that they are not above the law just because they are popular or serve a public need well. The law is the law as they quoted. This is not about killing Uber, but about making sure all players are within the ambit of the regulating body, hence fair to all concerned.

The ongoing crimes being committed elsewhere on other common-carrier modes have not and should not make us a nation no longer governed by the rule of law. No one again is trying to regulate people's reaction; but I would like to think that no one wants people to overreact as well to false news.

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5. Whether Premium Taxi will work, is smart or is better than Uber isn't important, because they will coexist. The existence of one is not cramping on the existence of the other. The only time these two suddenly conflicted was when you made them do so in your post.

I am passionate about this, James, because like you, I love and take Uber. I want them to get TNC status. I want the cloud of doubt to be removed on their legitimacy. I believe in their reason for existence. I love the fact that our commuting is leveling up. But I am disappointed at Uber for their inaction, which has created this whole mess. DOTC, LTFRB and Chairman Ginez have already reshaped regulation to accommodate Uber. Ano pa ba ang inaantay nila?

Entertaining read, wasn't it? Like we said, you be the judge.


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