Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
17th CONGRESS
Second Regular Session

6407

House Bill No.

Introduced by Representative Wes Gatch:

EXPLANATORY NOTE,

It is always the case that innovative developments outpace the laws of
the land. This of course is to be expected for what else is law other than the
tedious attempt to regulate what is already a reality in the daily lives of the
people, Inevitably therefore, game-changers, revolutionaries, and paradigm
shifts would exist in a legal framework that is foreign to their existence. One
such development is the very subject of this current bill, the development
brought about by the phenomenon of ride-sharing applications like “Uber”
and “Grab.” This bill therefore now aims to undertake the monumental task
of providing a novel legal framework for this phenomenon.

It is perhaps the proper measure of success in innovation that such
changes the way the world works. Uber and Grab have both done this. Using
these two platforms, it has changed the way people, especially in the metro,
travel and commute from one place to another. It has also changed the
consumer's attitude as regards to the purchase of vehicles. This is brought
about by the undeniable ease and convenience of these two platforms
allowing the rider to map out his route and be able to reliably predict his
time of arrival as well as the cost of it. When it works, as it often does, these
two platforms are as good as it gets in providing a truly satisfying riding
experience. But this of course begs the question of what we make of those
cases which are in the margins, such as in the instance of accidents causing
damage to life, limb, and property? Thus the question of managing
accountability inevitably arises. As it stands, it is staggeringly unclear
whether or not a passenger can hold Uber or Grab liable in the event of an
accident. As far as the representations of these two companies in a number
of public statements, their claim is that no ex contractu liability can be
enforced against them for there exists no contract of carriage to which they
are the party to. Fundamentally what this law therefore does is to create a
contract of carriage between Transportation Network Companies such as
Grab and Uber and the passenger. It is submitted that this solution is but
proper for precisely it is with the brand of service that these companies
present which the public avails of. In truth and in fact when a passenger
goes to Grab or Uber, it is the complete bevy of their package which a
passenger avails of, what is more it is them who accredits the would be
drivers. All these considered they should be the ones accountable to the
passengers they profess to serve.

Representative


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
17th CONGRESS
Second Regular Session

6407

House Bill No.

Introduced by Representative Wes Gatchalian

Se eae eee

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 Act.”

SEC, 2. Declaration of Policy. - It 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:

a) 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 @
Transportation Network Passenger (TNP), beginning at the time the
driver accepts a ride requested by the passenger through a digital
network controlled by a 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;


d) Transportation Network Company (TNC) 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.

e) Transportation Network Driver (TND) 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;

ff) 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 (TNVO) refers to
owners of TNVS used by a TND to provide TNS.

h) Transportation Network Passenger (TNP) 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 contract of
carriage. The liability may include, but is not limited to actual and moral
damages as well as indemnity for loss of earning capacity. The TNC and
the owner/operator of the TNV shall be jointly and solidarily lable with
the TND.


b)_ Taxicabs, limousines, or similar for-hire vehicles which also avail
of digital networks to connect and provide transportation services to their
passengers for pre-arranged rides shall likewise be covered under the
provisions of this Act and remain liable under the conditions set forth
under their Certificate of Public Conveyance and Necessity and other
existing laws, rules and regulations.

SEC. 6. Applicability of Existing Regulations. - All memorandums
and guidelines promulgated by the Board shall suppletorily apply to all
claims in case of any breach by the TNC or the owner/operator of TNV on
the contract of carriage without prejudice to any other administrative or
court proceedings instituted by the aggrieved party.

SEC. 7. Regulatory Authority. - TNCs and TNVOs shall be governed
by the provisions of this 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 TNC by obtaining and maintaining a permit to be issued
by the Board upon compliance with the requirements set forth by this Act
and other reasonable conditions as may be provided by the Board.

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 data that the Board 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 in an application not later than ten (10)
days after the change occurs. The Board shall prescribe a form for
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 revoked by the Board for reasonable cause. The
Board shall prescribe the form and requirements necessary for the
renewal of an accreditation;

b) The Board shall notify each person holding an accreditation
of the date of its expiration and the amount of the fee required for
the renewal. The Board shall send the notice not later than thirty
(30) days before the accreditation expires.


CHAPTER 3
OPERATION OF TRANSPORT NETWORK COMPANIES

SEC. 12. Agent. - A TNC shall maintain a resident agent for service of
process in the country.

SEC. 13. Fares. - A TNC charging a fare for its services shall disclose
to the TNP the fare calculation method within the company’s software
application service or on the company’s internet website and provide the TNP
with the applicable rates being charged for the service and the option to
receive an estimated fare.

SEC. 14, Identification of Vehicles and Drivers. - The TNC’s
software application or internet 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 to cover claims for incidents involving vehicle and
drivers while they are providing TNC services. It shall likewise cover claims
of passengers for breach of the contract of carriage per incident coverage.

‘The Board shall determine, upon consultation with stakeholders, the
amount that TNCs shall maintain during the validity of their accreditation.

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

ATND shall carry proof of transportation network company insurance
coverage with him or her at all times during his or her use of a vehicle in
connection with a transportation network company’s online-enabled
application or platform. In the event of an accident, a participating driver
shall provide the insurance coverage information to any other party involved
in the accident, and to a police officer, upon request.

SEC. 16. Electronic Receipt. - Upon completion of a trip, a TNC
shall transmit an 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
c) An itemization of the total fare paid, if any.

Electronic receipts of each TND of all its transactions shall be
recorded by the TNC and reported to the Bureau of Internal Revenue
(BIR) for purposes of taxation.

‘SEC. 17. Zero-tolerance Policy for Drug or Alcohol Use. -

a)Every TNC shall:

1)Implement a zero-tolerance policy that prohibits a TND
from using or being under the 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 complaint about a driver with whom
a TNP was matched and who the TNP reasonably suspects
was using or was under the influence of drugs or alcohol
during the course of the trip.

b) Upon receipt of a complaint alleging a violation of the zero-
tolerance policy, the TNC shall conduct an investigation into the
reported incident and immediately suspend the TND’s access to the
company’s digital network for the duration of the investigation.

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

SEC. 18. Driver Requirements. ~

a) Before allowing an individual to be a TND on its digital
network, a TNC shall:

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 vehicle
registration, motor vehicle liability insurance, and other
information required by the company;

2) Conduct or have a third party conduct a local and national
criminal background check for 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;

iii) Driving without a valid driver’s license; or

iv)Driving under the influence of aleohol or prohibited drugs.
2) Has been convicted at any time of:

i) Fraud;

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 transportation network services.


SEC. 19. No Street Hails. - A TND may only accept pre-arranged
rides made through a TNC’s digital network or software application service
and may not solicit or accept street hails.

SEC. 20. No Cash Trips. - A TND shall not solicit nor accept cash
payments from TNPs. Payment for TNS may be made only electronically
using the 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 Board pursuant to the Public Service
Law.

SEC. 22. No Discrimination; Accessibility. ~

a) A TNC shall adopt policies concerning non-discrimination
that comply with national laws;

b) A TND shall follow all policies concerning non-discrimination
and accessibility in compliance with national laws;

c) A TNC may not impose additional charges for providing
services to persons with disabilities;

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

e) 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 for
an extended ride beyond the pre-arranged destination.

SEC. 23. Records. - All TNCs shall maintain individual trip records
for at least one (1) year after the date the trip was completed. TNCs shall
also keep TND records for at least one (1) year from 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 unless:

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
ENFORCEMENT

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.

©) 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:

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;
iii. 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

¢) 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
from 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. Repeating Clause. - The pertinent provisions of the Land
Transportation and Traffic 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 after
its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved,