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On the Uber and Grab predicament

A lot has been said and written for or against Uber and Grab. Social media made sure the more popular but not necessarily the truthful ones are spread. One popular personality associated with motoring has even led an online petition against the rulings by the Land Transportation Franchising and Regulatory Board (LTFRB). An objective check of the facts reveal that LTFRB is not solely at fault here. Uber and Grab should not have promoted themselves and took in additional drivers (nagpaasa ng mga drivers) after the agency issued a moratorium last year. Estimates vary but it seems they have taken in tens of thousands of drivers (20.000? 30,000? 40,000?) and earned revenues along the way to what is now an historic penalty levied upon Uber and Grab by the LTFRB.

Perhaps the most level-headed article I’ve seen online is the following:

The thing about Grab, Uber and the LTFRB [by Vince Pornelos, July 18, 2017, https://www.autoindustriya.com/editors-note/the-thing-about-grab-uber-and-the-ltfrb.html]

It seems all is well, for now, as meetings were held between the DOTr, LTFRB and the concerned parties (Uber and Grab). In one of the meetings, a couple of Senators seem to have brokered a deal to resolve what appeared to be an impasse that a lot of people on social media reacted to. There are definitely a lot of vested (and veiled) interests involved here including those by various “operators” in the transport sector on both the sides of government and private sector. One takeaway though that I observed is that many appear to be against LTFRB even though the agency was truthful about their statements regarding the illegally operating transport vehicles. They seem to have made up their minds about the LTFRB and this is not surprising as transport problems have been festering for decades with little progress in terms of improving transport, conventional or innovative. Most people seem to have lost their patience about transport services and regulation, and perhaps this is a good thing if it translated to demanding for mass transit, too.

Some issues abroad on car sharing/ride sharing companies

There are two articles recently that are worth reading for those who are into ride-sharing/car-sharing. And I am not necessarily referring to those who regularly take Uber or Grab, or those who opt to use these whenever they need a taxi ride. There are many who are already studying these services being provided not by your traditional or conventional taxi companies or rental vehicle companies but by supposedly private individuals who supposedly have the spare time and spare vehicle that they can use to provide transport for other people. I use the word “supposedly” here because this is a big assumption and the premise by which transport network companies like Uber, Grab and Lyft have been able to go around the bureaucratic processes that taxi and other companies have to go through as formal public transport (i.e., public utility vehicles). These articles are along the lines of the discussions in previous articles I have posted here about ride-sharing/car-sharing, and are mostly based on the experiences in countries who have more developed and presumably better transport than us in the Philippines.

Denton, J. (2017) Two Federal Lawsuits Could Spell Big Trouble for Uber, Pacific Standard, http://www.psmag.com, April 10, 2017.

McGraw, D.J. (2016) How Lyft and Uber are Ignoring the Poor, Pacific Standard, http://www.psmag.com, May 12, 2016.

 

I leave it up to my readers (any researchers out there?) to pick-up the main points and perhaps look at the issues from different perspectives. I have pointed out before that the situation in Metro Manila could be very different from the situations in other major cities like Cebu, Davao and Iloilo. And so transport network companies may not necessarily succeed in cities where taxi services, for example, are significantly better than what we have in Metro Manila.

Grab at NAIA Terminal 2

Here is another useful post for travelers especially during this Holy Week and the summer holiday season in the Philippines. Many people usually look for a ride heading out from the airport. Not everyone would have someone to fetch them. There are several options now for those wanting to take public transport. Aside from the conventional taxis, there are also airport taxis, vans and the more recent airport bus service provided by UBE Express. Ridesharing or car sharing services are also available and the most visible will be Grab with options for either car or taxi available via you own app or through their booths located at the NAIA airport terminals. There should be a Grab booth located at the arrival areas of NAIA’s terminals. They also have a booth at the Mactan Cebu International Airport terminal.

You can easily spot the Grab booth and pick-up area as you exit the terminal’s arrival lounge.

You can book a ride with the grab staff at the booth if you don’t have a smart phone and the Grab app. You can also just call for a car or taxi using the app. This is the pick-up point for Grab Cars. Grab Taxis would have to use the driveways for taxis parallel and just to the left of this driveway.

Grab has become a game changer for taxis out of the airport. In fact, my own father found them to be a convenient and safe option for a recent trip from Terminal 2 to our home in Cainta. He didn’t have to negotiate fares and he paid a very reasonable fare while enjoying his ride on a recent model car.

Some views on Uber and Grab

I took screenshots of a DOTr social media post on Transport Network Companies (TNCs) and the comments made on the post. If the post is an accurate quote of the current LTFRB Chair, then it reveals how a top official of the LTFRB (and at the same time DOTr) thinks about such services and perhaps shows a lack of understanding for what these “innovative” companies are all about. I purposely put the word innovative in quotation marks because there are also challenges that Uber is currently facing.

But then can we blame the official and others of how they understand the business models of TNCs like Uber and Grab? Can we blame them when these companies’ models’ seem to be quite different from their original set-up that made them the popular modes that they are now in many countries? At the same time that they have become the bane of conventional taxis, it seems they are also killing off the good ones, too. In my opinion, Uber and Grab are treading a fine line between ridesharing/carsharing (their original model) and taxi services.

Here are some social media posts not too long ago regarding fare regulation being applied to TNCs:

 

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There are healthy (as well as inane) discussions online about TNCs. More recently, there were reactions when Uber appeared to take advantage of a nationwide jeepney strike. I guess people should take in different perspectives about TNCs and in the end, it is the commuters’ welfare that is important regardless of what modes of transport are available them. That welfare should be the priority of government and we should  not blame the latter when they are actually doing their jobs.

The other TNCs – Wunder and Angkas

The Land Transportation Franchising & Regulatory Board (LTFRB) recently issued a couple of press releases pertaining to two Transport Network Companies (TNCs). The issuances were for Wunder and Angkas to cease operations. Copies of the press releases were posted at the Department of Transportation (DOTr) Facebook page and are reproduced here:

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Prior to these press releases, both Angkas and Wunder have been aggressively promoting themselves in social media. Wunder is the more established entity and is actually based in Germany. Its operations are basically carpooling and match drivers with passengers traveling about the same time and along their likely routes between homes and workplaces/schools.

Angkas appears to be a locally developed app. The big difference here though is that it is for motorcycle taxi services. While it is clear that tricycles (3-wheelers = usually a motorcycle plus a sidecar) used as public transportation are under the jurisdiction of local government units, their operations are governed by national laws. These include tricycles supposedly being banned from operating along national highways. Motorcycle taxis are regulated along the same lines with LGUs having the responsibilities over their operations (refer to my previous posts on habal-habal and Skylab) and are generally tolerated in rural areas where there is a lack of motorized transport services available. As far as the national government is concerned though, motorcycle taxis are prohibited and this is due primarily to safety concerns.

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I don’t know where Angkas gets the “professional motor taxi” tag since it is most likely that riders offering their services are not at all trained or experienced to provide public transport services and on a 2-wheeled vehicles. Such operations are risky especially to passengers. Even in countries like Thailand and Vietnam where motorcycle taxis are generally legal, it is established that such transport modes are unsafe with motorcycles being involved in more crashes compared to other vehicles. Motorcycles also have a higher fatality rate compared to other vehicles.

I think Wunder is different and could actually be closer to the classic (or conventional) carpooling idea compared to ridesharing/carsharing leaders Grab and Uber. Wunder clearly states that its aim is to maximize the available seats for the two likely trips people make with their vehicles. These two trips are usually one in the morning (i.e., to the workplace or to school) and another in the afternoon or evening (i.e., to home). As such, the income derived from Wunder is limited to the 2 trips although a driver can maximize income by accepting multiple passengers. In contrast, many (not all) Uber and Grab drivers in the Philippines operate practically the whole day and are basically taxis. I would recommend that the LTFRB look into the operations and business model of Wunder and perhaps reconsider their decision against it.

Do people understand what Uber and Grab really are?

Over the holidays, I’ve read a lot of posts about Uber and Grab. Mostly, these were complaints about the surge pricing scheme of Uber. A lot of people cited the exorbitant rates Uber charged for trips even short ones like Ortigas to Center to Greenhills and Trinoma to Katipunan. Though the complaints are legitimate ones, I also try to see the other side of the coin considering Uber and Grab do tell potential passengers how much it will cost them for such commutes during peak periods (i.e., when roads are congested). Potential riders do have a choice whether they should take the rider (and therefore agree with the fare stated by the app) or take another transport mode instead. The issue here should not be entirely Uber’s or Grab’s fault. Our public transport system, particularly in Metro Manila, sucks. And that includes the conventional taxis that could have provided better services if regulations were strictly implemented or if the operators managed their drivers and maintained their vehicles well. Based on my experience, taxis in Cebu, Iloilo and Davao, for example, are better managed and regulated, and provide better service quality than those in Metro Manila.

Then there were the joint LTFRB and DOTr advisory for Uber and Grab units and the LTFRB order on surge pricing and fare rates.

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From both cases, it is clear that car-sharing or ridesharing services like Uber and Grab are treated as taxis rather than as premium services that likely entail higher fares but are subject to prospective passengers’ willingness to pay for such services.

Such opens the door for more questions than answers: Is this a misunderstanding or perhaps a deliberate action on the part of Philippine regulators (LTFRB and DOTr)? Why can’t they impose the same standards for vehicles, operators and drivers of conventional taxis? Wouldn’t it be in the best interest of the general riding public for LTFRB to clamp down on conventional taxis in order to reduce dilapidated vehicles as well as unqualified drivers? Surely, conventional taxis will become more attractive if they provide better services including significant reductions in the incidence of typical complaints against taxis like negotiating fares and refusing passengers because of their destinations.

Here are some more questions that need clear and objective answers for one to have a fair assessment of these services:

  • Do these show how much we (both commuters and regulators) understand how these car-sharing modes are supposed to operate?
  • Do officials at DOTr and LTFRB, who are supposed to be regulators of public transport services know how Uber and Grab are supposed to operate?
  • How do they really fit in considering all the other modes of transport available to commuters?

Grab vs Uber: the ridesharing services battle for supremacy?

I have made it a custom to share articles here on my blog. One reason for me to do this is so I have an archive of sorts for articles that caught my attention that I have either read or not that I want to get back to. Here is another article on ridesharing, this time from a popular magazine:

Grab vs Uber: Who’s getting the riders and making money?

This is relevant material for ongoing studies we are doing about ridesharing. I am also writing a couple of papers on this topic that we intend to present and publish next year.