Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
‘Third Regular Session

House Bill No. 6160

Introduced by Honorable Sherwin T. Gatchalian

Explanatory Note

One of the reasons for the worsening traffic situation in the Philippines is
the over population of vehicles in the metropolitan area. Thousands of public
utility vehicles (PUVs) and private vehicles clog the streets of Manila evety day,
which results in traffic jams along the main highways and major roads. As a
consequence, not only ig 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.” 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 TNVS 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 improye 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 liew of this development, the DOTC issued Department Order No.
2005-011 (DO No. 15-011) to recognize the new nature of rideshating services.
It intends to modernize and improve transportation services by the innovative
use of technology to facilitate ridesharing services between a transportation


network driver and a passenger. DO No. 15-011 allowed Transportation
Network Companies to operate in the Philippines and facilitate transactions
between a transportation network driver and a passenger. 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 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 and fotemost is the classification of TNCs and TNVs as a
public utility. TNCs and TNVs are obligated under a contract of carriage once a
passenger avails of their service. As a common carrier, 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 transportation network service. 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 transportation network drivers 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 serviée, support for the
passage and approval of this legislation is earnestly sought.

sentative
preity t, Valenzuela City

+ CPUC Decision 13-09-045


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session

House Bill No.__6160

———

Introduced by Honorable Sherwin T. Gatchalian
_—

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 companiés 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 to a transportation network passenger,
beginning at the time the driver accepts a ride requested by the passenger
through a digital network controlled by a transportation network company,
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 (IND) refers to an individual who:

i, Receives connections to potential transportation network
passengers and related services from a TNC in exchange for payment of a
fee to the company; and

ii, Uses a transportation network vehicle to offer or provide
transportation network services to a transportation network passenger
through a digital network controlled by the company in exchange for
compensation or payment of a fee;

{) Transportation network vehicle (TNV) refers to a vehicle accredited by a
transportation network company and used by a transportation network
driver to provide transportation network services;

g) Transportation Network Vehicle Operators (TNVO) refers to owners of
TNVS used by a transportation network driver to, provide transportation
network services.

h) Transportation network passenger (TNP) refers to an individual who
uses a TNC’s digital network to connect with a transportation network driver
who provides transportation network services 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 transportation network company to cover any liability claims for


breach, bodily injury, death and property damage arising during the course
of the transportation network service.

SEC. 4. Nature of Transportation Network Companies And Vehicles.
~ TNCs offer, represent and/or engage themselves to carry or transport
passengers who opt to avail of their digital network service. TNCs are thereby
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 transportation
network service 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 liable with the TND.

b) Taxicabs, limousines, or similar for-hire vehicles which also avail of
digital networks to connect and provide transportation services t 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 an 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.

No Term and Condition in a 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.

A TND 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 for purposes of
taxation.


SEC. 17. Zero-tolerance Policy for Drug or Alcohol Use. -
a)A 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;

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) On 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.

c) 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;

|

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 alcohol 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 transportation network services 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) ATNC 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 TNP an opportunity to indicate whether they
require a wheel-chair ai sible vehicle. If a TNC is unable to arrange
wheelchair-accessible transportation network service, the company shall



direct the passenger to an alternate provider of wheelchair-accessible
service, 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 year after the date the trip was completed. TNCs shall also keep TND
records for at least one 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 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:

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 shalt establish and maintain a complaint procedure through
which any TNP or another person using the transportation network service


may submit a complaint with the Board about the company, the
transportation network service, 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 transportation network services;

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
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, Repealing 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.

2. 81, Bffectivity. 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.