‘E REP! FRESE

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Republic of the Philippines Ka eA
HOUSE OF THE REPRESENTATIVES [2 RECEIVED oi
Quezon City —
EIGHTEENTH CONGRESS en
First Regular Session
HOUSE BILL No._1538

Introduced by REPRESENTATIVES ALFREDO A. GARBIN, Jr. and
ELIZALDY S. CO.

AN ACT
REGULATING TRANSPORTATION NETWORK SERVICES, IMPOSING AND
AUTHORIZING FEES, PROVIDING PENALTIES FOR VIOLATIONS THEREOF AND
FOR OTHER PURPOSES:

EXPLANATORY NOTE

One of the reasons for the worsening traffic situation in the Philippines is the
overpopulation of vehicles in the metropolitan area. Thousands of public utility vehicles (PUVs)
and private vehicles clog the streets of Manila every day, which results in traffic jams along the
main highways and major roads. As a consequence, not only is the transport of commuters
delayed and their time wasted but the country as a whole suffers economic losses. According to
Socioeconomic Planning Secretary Arsenio Balisacan, “the Philippines is losing P2.4 billion a
day in potential income due to traffic congestion that eats up time that could have been used for
productive pursuits.” The National Economic and Development Authority (NEDA) proposes that
the primary solution to the traffic situation is still the improvement of transportation
infrastructure. However, we cannot standstill while waiting for the government to develop our
transportation network. We must look for alternatives to alleviate the suffering of our people in

their daily commute.

It is therefore high time that we recognize the potential of Transportation Network
Services (TNS) to spur advancements in the transportation industry. The emergence of
‘Transportation Network Vehicle Services (TNVS) such as Uber and Grab Taxi provides
commuters more choices in their daily commute. The additional competition in the transportation
industry will compel existing taxi operators to improve their service in terms of convenience,
safety and efficiency. Furthermore, ridesharing will help decongest roads by encouraging vehicle

owners to leave their car at home and utilize a transportation network service instead.


In lieu of this development, the DOTC issued Department Order No. 2005-011 (DO No
15-011) to recognize the new nature of ridesharing services. It intends to modernize and improve
transportation services by the innovative use of technology to facilitate ridesharing services
between a Transportation Network Driver (TND) and a Transportation Network Passenger
(TNP). DO No. 15-011 allowed ‘Transportation Network Companies (TNC) to operate in the
Philippines and facilitate transactions between a TND and a TNP. It also provides the guidelines
for the selection and accreditation of drivers.

However, DO No. 15-011 has faced heavy opposition since its promulgation. Taxi
operators allege that the said Order offers unfair competition in favor of TNCs and TNVs
because they are not subject to the same regulation as that of taxis. Some Congressmen also
expressed their reservation citing issues on liability and tax collection.

This bill seeks to address these questions by defining the nature of ‘TNCs and TNVs. First
ition of TNCs and Transportation Network Vehicles as a public
utility. TNCs and TNs are obligated under a contract of carriage once a passenger avails of

and foremost is the classi

their service. As a common cartier, liability attaches once the contract between a TNP, a TNV,
and a TNC is executed. A TNC therefore cannot evade liability by contending that they are
merely a technological platform to connect the TNP with the TND. The TNC is the means and
method by which the transportation service is arranged and facilitated. Furthermore, they amass
profit from facilitating the TNVS. The TNCs cannot have their cake and it eat too. They must be
responsible for the service they provide and be held liable for any breach on the contract of

carriage.

This bill also provides the standards in the accreditation of transportation network service
providers and ensure the qualification of their drivers. It also requires the TNDs to issue
electronic receipts for passenger safety and taxation purposes.

It is our intention to ensure that regulation is not a hindrance, but continues to be the
safety net that the public can rely on for its protection.' In the interest of transportation

development and public service, support for the passage and approval of this legislation is
earnestly sought.

ALFREDO A. f Jr. (Ke. co

1 CPUC Decision 13-09-045,

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Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. _1538

Introduced by REPRESENTATIVES ALFREDO A. GARBIN, Jr. and
ELIZALDY S. CO

AN ACT
REGULATING TRANSPORTATION NETWORK SERVICES, IMPOSING AND
AUTHORIZING FEES, PROVIDING PENALTIES FOR VIOLATIONS THEREOF AND FOR
OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress

assembled:
CHAPTER 1
GENERAL PROVISIONS,

SECTION 1. Short Title. — This Act shall be known as the “Transportation Network Service

SEC. 2. Declaration of Policy. — \t is hereby declared that the State shall recognize and
encourage alternative modes of transportation to provide the riding public with more options and to
spur advancements in the transportation industry. Towards this end, the State shall enact measures for
the development and regulation of transportation network companies and vehicles and to ensure the

safety of both the driver and the riding public.
SEC. 3. Definition of Terms. — As used in this Act:
@) Board refers to the Land Transportation Franchising and Regulatory Board;

b) Digital network refers to any online-enabled application, software, website, or system
offered or used by a transportation network company that enable the pre-arrangement of a ride with
a transportation network driver;

¢) Transportation Network Services refer to transportation provided by a Transportation
Network Driver (TND) to a Transportation Network Passenger (TNP), beginning at the time the
driver accepts a ride requested by the passenger through a digital network controlled by a

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Transportation Network Company (TNC), continuing while the driver transports the passenger, and
ending at the time the last requesting passenger departs from the driver’s transportation network

vehicle;

) Transportation Network Company (INC) refers to an organization, whether a corporation,
partnership, sole proprietor, or other form, operating in the Philippines that provides pre-arranged
transportation services for compensation using an online-enabled app or platform to connect
passengers with drivers using their personal vehicles.

€) Transportation Network Driver (IND) refers to an individual who:

i, Receives connections to potential TNP and related services from a TNC in exchange

for payment of a fee to the company; and

ii, Uses a TNV to offer or provide TNS to a TNP through a digital network controlled
by the company in exchange for compensation or payment of a fee;

J) Transportation Network Vehicle (TNV) refers to a vehicle accredited by a TNC and used by
a TND to provide TNS;

g) Transportation Network Vehicle Operators (INVO) refers to owners of TNVS used by a
‘TND to provide TNS.

h) Transportation Network Passenger (INP) refers to an individual who uses a TNC’s digital
network to connect with a TND who provides TNS to the individual using a TNV between points
chosen by the individual

i) Commercial Liability Insurance refers to a standard insurance policy issued to a TNC to
cover any liability claims for breach, bodily injury, death and property damage arising during the
course of the TNS.

SEC. 4. Nature of Transportation Network Companies And Vehicles. — TNCs offer, represent
and/or engage themselves to carry TNPs who opt to avail of their digital network service. TNCs are
hereby declared as common carriers. A contract of carriage commences from the time a TNP makes an
pre-arranged ride with the TNC and ends at time the TNV carrying the TNP arrives at the designated

location.

‘TNV operators are common carriers in the course of the TNS and are responsible for any breach

in the contract of carriage.

SEC. 5. Liabilities. -

a) The diligence required of TNCs and TNDs in the conduct of their business is extra-ordinary
diligence as defined by law. A TND is presumed to be negligent when there is breach in the


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contract of carriage. The liability may include, but is not limited to actual and moral damages «
weil as indemnity for loss of eamning capacity. The TNC and the owner/operator af the ‘ENV sho

be jointly and solidarily liable with the TND.

b) Taxicabs, limousines, or similar for-hire vehicles which also avail of diyne! veiworks 1

connect and provide transportation services to their passengers for pre-arranged rides shail kew's

forth unde!

be covered under the provisions of this Act and remain liable under the conditions »

their Certificate of Public Conveyance and Necessity and other existing taws, rules and 108

SEC. 6. Applicability of Existing Regulations. - Al) memorandums and guidelines jronvulyais
by the Board shail suppletorily apply to all claims in case of any breach by the {NC or tl
‘owner/operator of TNV on the contract of carriage without prejudice to any other administrative «:

court proceedings instituted by the aggrieved party

SUC. 7. Regulatory Authority. — TNCs and TNVOs shall be governed by the provisions of th.
Act and other rules adopted by the Board pursuant to this Act.

CHAPTER 2
ACCREDITATION OF TRANSPORTATION NETWORK COMPANY

SEC. 8. Accreditation. ~ A person, firm or corporation shall only be allowed to operate a FNC
by obtaining and maintaining a permit to be issued by the Board upon compliance with th
requirements set forth by this Act and other reasonable conditions as may be provided by the Isours

SEC 9. Accreditation Fee. - An accreditation fee to be set by the Board shall be paid upon
filing of the application and before the issuance of the Certificate of TNC Accreditation,

SEC 10. Application for accreditation. ~

a) An application for a TNC accreditation must be in a form prescribed by the Board the
application shall contain information required by this Act and other pertinent dala that tie Bos
may deem necessary to assess and identify the applicant's qualifications to adequately serve the

public

b) ‘The applicant shall notify the Board of any material change in the information included
‘an application not later than ten (10) days after the change occurs. The Board shall prescribe a for

tor the disclosure of material changes.
SEC. 11. Term and Renewal of Accreditation. —

a) An accreditation issued under this Act is valid for two years unless sooner revohed by the

oard for reasonable cause. The Board shall prescribe the form and requirements necessary for the

renewal of an accreditation;


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b) ‘The Board shall notify each person holding an accreditation of the date of its expirativv

the amount of the fee required for the renewal. The Board shall send the notice not later th

(30) days before the acereditation expires.
CHAPTER3
OPERATION OF TRANSPORT NETWORK COMPANIES:
SEC. 12. Agent. ~ A TNC shail maintain a resident agert for service of process in the couniry

SEC. 13. Fares. — A TNC charging a fare for its services shall disclose to the | NP ie fa

's mteTnet

calculation method within the company’s software application service or on the compa
website and provide the TNP with the applicable rates being charged for the service and the opliva i

receive an estimated fare.

SEC. 14. Identification of Vehicles and Drivers. ~ The TNC’s software application oF itecne

website must display a picture of the TND and the plate number of the TNV

SEC. 15. Insurance Coverage. - TNCs shall maintain a commercial liability insurance policy Ww

cover claims for incidents involving vehicle and drivers while they are providing TNC services. 1¢ shall

likewise cover claims of passengers for breach of the contract of carriage per incident coverage

Ihe Board shall determine, upon consultation with stakeholders, the amount that (NCS shal

maintain during the validity of their accreditation.

Hach TNC driver shall maintain insurance coverage.

Nothing in the TNC’s Terms of Service can be used or relied on by the TNC to deny

coverage, or otherwise evade the insurance requirements to be determined by the Board

A-TND shall carry proof of transportation network company insurance coverage with him
her at all times during his or her use of a vehicle in connection with a transportation neiwork
company’s online-enabled application or platform. In the event of an accident, a participating drive:
shall provide the insurance coverage information to any other party involved in the accident, sind to &

police officer, upon request.

SEC. 16. Electronic Receipt. ~ Upon completion of a trip, a TNC shall transmit ai: electronic

receipt to the TNP that lists:
a) The origin and destination of the trip;
'b) The total time and distance of the trip; and
¢) An itemization of the total fare paid, if any.

Electronic receipts of each TND of all its transactions shal! be recorded by the TNC anc

reported to the Bureau of Internal Revenue (BIR) for purposes of taxation.


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SEC. (7. Zero-tolerance Policy for Drug or Alcohol Use.
a)Every TNC shall:

I)implement a zero-tolerance policy that prohibits a TND from using or beiny under tie

influence of illegal drugs and alcohol abuse; and,

2)Post in its internet website a notice of the policy and the procedures to report a compla
about a driver with whom a TNP was matched and who the TNP reasonably suspects w

using or was under the influence of drugs or alcohol during the course of the tp

b) Upon receipt of a complaint alleging a violation of the zeru-tolerance policy. the | NC sh
conduct an investigation into the reported incident and immediately suspend the [ND's access

the company’s digital network for the duration of the investigation.

c) Maintain records relevant to any complaint for a period of at least two years after receipt

the complaint
SEC. 18, Driver Requirements. —
a) Before allowing an individual to be a TND on its digital network, a TNC shal

1) Require the individual to submit an application to the TNC, which must include information
regarding the individual’s address, age, driver’s license, driving history, motor vebick

registration, motor vehicle liability insurance, and other information required by th

company:

2} Conduct or have a third party conduct a local and national criminal background check to

each individual; and
3) Obtain and review the individual’s driving record.

b) ‘The TNC may not permit any individual to act as a TND on its digital network when the

individual
1) Has been convicted of any of the following offenses in the preceding three year period
i) Evading arrest or detention;
ii) Reckless driving:
ifi Driving without a valid driver’s license; or
iv)Driving under the influence of alcohol or prohibited drugs.
2) Has been convicted at any time of:

i) Fraud;


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ii) A sexual offense; or
iii) Theft

3}Does not possess a valid professional driver's license, and

4)Does not possess proof of registration for the TNV used to provide tansporiat:

services.

SEC. 19. No Street Hails. — A TND may only accept pre-arranged rides made throupiy « {Nc

digital network or sofiware application service and may not solicit or accept street hails

SEC. 20. No Cash Trips. - A TND shall not solicit nor acvept cash payments from 1 Nis
Payment for ‘TNS may be made only electronically using tae TNC’s digital network or software

application

SEC. 21. No Fleet Service. - A TNC is not allowed to have its own fleet service Otherwise it
shall be required to secure a Certificate of Public Convenience and Necessity from the Burd pursuut

to the Public Service Law.

SEC. 22. No Discrimination; Accessibt

a) A’TNC shail adopt policies concerning non-discrimination that comply with national laws

b) A TND shall follow all policies concerning non-discrimination and accessibility

compliance with national laws;

c) A TNC may not impose additional charges for providing services to persons wit

disabilities,

d) A TNC shall provide a TNP an opportunity to indicate whether they require a wheel-cha’
accessible vehicle. If a TNC is unable to arrange wheelchair-accessible TNS, the company sha!)
direct the TNS to an alternate provider of wheelchair-accessible TNS, if available,

) A ‘TND may not discriminate in the provision of transportation network services based on
the geographic location of a departure point or destination. A TND may refuse a request tor as
extended ride beyond the pre-arranged destination

SC. 23. Records. — All TNCs shall maintain individual trip records for at least one (1) yea:

after the date the trip was completed. TNCs shall also keep TND records for at least one (1) year teow
the time a'TND’s activation on the company’s digital network has ended.

SEC 24. Personally Identifiable Information, -

a) A“TNC may not disclose a ‘TNP’s personally identifiable information to a third party uniess

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1) The passenger consents to the disclosure;
2) The disclosure is required by a legal obligation; or

3) The disclosure is required to protect or defend the terms of use of the service or investigate

violations of those terms.

b) In addition to the disclosures authorized under paragraph (a), a TNC may share a TNP’s
name or telephone number with the TND providing transportation network services to the
passenger to facilitate correct identification of the TNP by the TND or to facilitate communication
between the TNP and the TND.

CHAPTER 4

(FORCEMENT

SEC. 25. Record Audits. ~ The Board may audit the records of a TNC in connection with the
performance of its duties under this Act through investigations of specific alleged violations or a
random sample of the TNC’s records related to TND.

Failure to provide records as required by this Section constitutes a violation of this Act
SEC. 26. Disciplinary Action; Fine. -

a) The Board, after due notice and opportunity for hearing, may deny an application for an

accreditation or suspend or revoke an accreditation if the applicant:

1) Makes a material misrepresentation or omission in any application or other information filed

under this Act or rules of the Board;
2) Violates this Act or a rule or order of the Board;
3) Violates any law relating to the operation of a TNC; or
4) Fails to maintain the qualifications for an accreditation.

'b) In addition to the authority under the preceding paragraph (a), the Board, after due notice
and opportunity for hearing, may request that the Department of Justice (DOJ) bring an action
against a person that has violated this Act or the rules promulgated by the Board pursuant to this
Act to collect a fine in the amount not to exceed Fifty thousand pesos (P50,000.00) for each

violation.

c) Each act as enumerated in paragraph (a) of this Section constitutes a violation and each day
a violation continues will be considered a separate violation, In determining the amount of penalty,

the Board shall consider:

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i, The seriousness of the violation, including the nature, circumstances, extent, and gravity of

any prohibited act, and the harm or potential harm to the safety of the public:
ii, The economic damage to the public caused by the violation;

i. The history of previous violations,
iv. The amount necessary to deter future violations;
v. Efforts to correct the violation; and

vi. Any other matter that justice may require.

SEC. 27. Complaint Procedure and Notice. ~

a) A TNC shall establish and maintain a complaint procedure through which any TNP or
another person using the transportation network TNS may submit a complaint with the Board about
the company, the TNS, a TND, or another affiliate of the company;

b) A TNC shall provide a notice of the complaint procedure provided by this Section to each
‘TNP and to each person that contacts the company to inquire about TNS;

c) A'TNC shall provide notice of the complaint procedure under this section to each electronic

receipt required under this Act;

d) The Board shall approve the content and manner of delivery of the notice required by
subsections (a), (b), and (c); and

e) Failure to provide notice as required by this Section is a violation of this Act.
CHAPTER 5
FINAL PROVISIONS

SEC. 28. Implementing Rules and Regulations. — Within (60) days trom the effectivity of this,
‘Act, the Board shall promulgate the implementing rules and regulations as may be necessary to ensure

the efficient and effective implementation of this Act.

SEC. 29. Separability Clause. — Should any part of this Act be declared unconstitutional, the
rest of the provisions of this Act shall continue to be in effect and subsisting.

SEC. 30. Repealing Clause. ~ The pertinent provisions of the Land Transportation and ‘Trattic
Code, in so far as they are inconsistent herewith, are hereby amended or modified accordingly. The
provisions of other laws, decrees, executive orders, rules and regulations inconsistent with this Act are

hereby repealed, amended, or modified accordingly.

SEC. 31. Effectivity. — This Act shall take effect fifteen (15) days afier its publication in the

Official Gazette or in at least two (2) national newspapers of general circulation.
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Approved,

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