1 month ago
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The Land Transportation Franchising and Regulatory Board (LTFRB) has announced that it will issue a memorandum circular that will require transportation network companies (TNC) and operators to shoulder the 20 percent fare discount given by law to persons with disabilities (PWD), senior citizens, students, as well as national athletes and coaches.
The 20 percent discount on fares for these sectors is based on four existing laws, namely, the Expanded Senior Citizens Act, Expanded PWD Act, National Athletes and Coaches Benefits and Incentives Act and the Student Fare Discount Act.
Republic Act 9994 or the Expanded Senior Citizens Act provides that senior citizens shall be entitled to the 20 percent discount in the actual fare for land transportation travel in public utility buses, public utility jeepneys, taxis, Asian utility vehicles, shuttle services and public railways, including the LRT, MRT and Philippine national railways, as well as in the actual transportation fare for domestic air transport services and sea shipping vessels and the like. The establishment may claim the discounts as tax deduction based on the cost of the goods sold or services rendered.
Meanwhile, RA 10754 which amended the Magna Carta for Persons with Disability states that persons with disability shall be entitled to at least 20 percent discount on fare for domestic air and sea travel and on the actual fare for land transportation travel such as but not limited to public utility buses or jeepneys, taxis, Asian utility vehicles, shuttle services and public railways. Just like in RA 9994, the establishments may claim the discounts as tax deductions based on the net cost of the goods sold or services rendered.
RA 11314 or the Student Fare Discount Act also mandates the entitlement by students to a 20 percent discount on domestic regular fares covering all public transportation utilities such as but not limited to public utility buses, public utility jeepneys, taxis and other similar vehicles-for-hire, tricycles, passenger trains, aircraft and marine vessels. It does not cover school service, shuttle service, tourist service and any similar services covered by contract or charter agreement and with valid franchise or permit from the LTFRB.
The said law provides that the public transportation utility operator may claim as tax deduction the student fare discount granted based on the cost of the services rendered.
Likewise, RA 10699 provides that national athletes and coaches registered as such shall be entitled to the grant of a 20 percent discount from all establishments relative to the utilization of transportation services and such privately owned establishments shall enjoy tax deduction equivalent to the discounts extended.
The four laws do not mention TNCs, also called ride-hailing companies which are companies that connect passengers with drivers using their personal vehicles for prearranged trips using a digital network and TNVS. As defined by the Land Transportation Office in its portal, it is the TNC that provides the technological infrastructure such as mobile applications that enables users to request rides and drivers to accept those requests. The TNVS, meanwhile, refers to the specific service or category of vehicles that operate under a TNC.
In many cases, TNVS drivers are individuals who register with TNCs to use their personal vehicles to offer transportation services.
As explained by the TNVS Community, these TNVS drivers pay daily around 20 percent of their gross earnings or around P800 of the standard gross earning of P4,000 per day as a commission for the TNC plus a boundary of P1,000. In a boundary set up, the driver pays for the maintenance of the vehicle that they are driving and the fuel cost. The driver may or may not be the owner of the vehicle but the TNC does not own the vehicle but merely maintains the app.
Based on this system, it is the accredited driver/vehicle that provides the transport service while the TNC (i.e. Grab, Angkas, Move It, etc.) merely gets a commission when it connects the TNVS driver to the passenger.
It is no different from the public utility jeepney ecosystem where the barker looks for a passengers and connects the passenger to the jeepney driver for a commission, or in the case of airport transport, where online ticket booking platforms or even travel agencies help the passenger for a commission to connect to an airline company that provides the transport service.
In the case of PUJs, the 20 percent discount mandated by law is shouldered by the jeepney driver or vehicle owner/operator while in air transport, it is the airline company, not the online booking platform, that gives the fare discount.
So why should it be any different for TNCs and TNVS vehicles/drivers?
The four laws that govern fare discounts to PWDs, senior citizens, students and athletes/coaches clearly provide that the discount shall be based on the actual fare nor is there any rule or regulation or ordinance that clearly provides as to who should bear the cost and to what extent, although according to Sen. Raffy Tulfo, there is an existing LTFRB circular that indicates that TNC must shoulder the discount and not the driver which the LTFRB has not confirmed.
But what is clear is that based on logic just by reading what the laws provide as well as what other types of transport systems do, it is beyond doubt that it is the TNVS service provider which is the TNC partner vehicles/drivers that should provide the discount.
There are TNCs that have been voluntarily shouldering a portion of the discount even if they are not legally mandated to.
If the LTFRB pushes thru with its plan to require TNCs to shoulder the 20 percent fare discount instead of the current practice where it is the TNVS driver that assumes the discount, or at the least, for the TNC to shoulder 80 percent of the 20 percent discount, it will be illegal since it will not have any legal basis or even contrary to what the four laws provide as to the discount being applied on the actual fare. The law also clearly provides that the discount is on the one providing the transportation service, a service provided not by the TNC but by the TNVS driver/operator.
There are groups that even want the TNCs to reimburse whatever discounts have been paid for by the TNVS accredited/partner vehicles and drivers. But again this would be illegal for lack of a legal basis. This would require an amendment of existing laws and the LTFRB cannot issue a regulation that does not have its support in the law.
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