Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House Bill No.6 766

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

In this fast changing world, it would be a common occurrence for
matters to be rendered obsolete by technological evolution and innovation.
And, it appears that even legislative codes and edicts, which have governed
conducts or established standards for decades, or even centuries, are not
immune. One such rule pertains to the regulation of public utilities,
specifically common carriers or public transport.

The advent of mobile communications technology and smart telephony
brought to us the transportation nctwork vehicle services (TNVS) or just
transport network services (TNS). Today, there are several TNVS companies
providing pre-arranged transportation services for compensation using an
internet-based application or digital platform technology to connect
passengers and drivers using their personal vehicles.

It is said that the TNVS concept started as ride sharing internet apps
(software applications). This allowed car owners to hitch another person, a
passenger, and charge them for such. In this case, the car owners are usually
professionals or working class persons who bring their cars to work, and who
would want to have a public carpool of his vehicle, maybe on the way to work
or home.

This arrangement gives so much benefit for several parties involved.
On the onc hand, the car owner would be able to save on moncy as another
person shares on the fuel expenses. On the other hand, the passenger would
save on bringing his or her own motor vehicle and gets a ride that is far more
comfortable than regular public transport. As for the general public, this
lessens traffic and road congestion.

Lately, the more popular TNVS are the full scale taxi or public transport
services. In this case, car owners / drivers apply for accreditation of their
motor vehicles with the TNVS company and make them available for rental


by any passenger. The passenger pays the TNVS company for the service,
while the latter pays the car owner / driver afterwards.

As the accredited operators of TNVS are using reiativeiy new, and even
classy, motor vehicles, manned by courteous drivers, and most important,
with pre-fixed fares which do not leave room for the usual fraud committed
by unscrupulous taxi drivers, the public has since embraced this kind of public
transport service.

However, these TNVS operations have put to the test the public
transport regulations that have long been adopted and used, not just in the
Philippines, but in several countries.

Foremost of this is the need for a special permit to operate a public
transport service. As in the Philippines, it is the franchise, (Certificate of
Public Convenience (CPC), which the Land Transport and Franchising
Regulatory Board (LTFRR), grants to a taxi operator or common carrier. And,
the grant of this franchise entails a lot of requirements. These include, among
others, measures of fitness of the operator / driver; requirement that the driver
is a professional driver; procurement of public liability insurance;
roadworthiness of the motor vehicle; prescribed rates for the service; and,
most important, that as a common carrier, the driver or the operator exercise
extraordinary diligence in ferrying the passenger.

One of the most contentious issue on the TNVS operations is the limit
of the number of operators which should provide this kind of service. For the
longest time, the LTFRB has limited the number of taxi franchises. On the
contrary, the TNVS companies accredited so many drivers which just
contributed to traffic congestion in the metropolis.

Thus, while the benefit to the general public of these TNVS operations
are recognized, there is still a need for regulation for its operations.

This bill, unlike most draft legislations on regulating TNVS operations
prescribes minimal standards. It grants the LTFRB, the governmental adjunct
that has e specialized in regulating the operations of common carriers,
much flexibility, so that the government regulation would not stand in the way
of technological evolution and innovation that benefits the general public.

In the view of the foregoing, the passage of the bill is hereby being
earnestly sought.

Representative


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6766

House Bill No,

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT
PRESCRIBING RIDESHARE SUPPORT COMPANIES,
PROVIDING REGULATIONS GOVERNING THEIR
OPERATIONS, AND CLARIFYING THE SCOPE OF
COMMONWEALTH ACT 146, ALSO KNOWN AS THE
TAX CODE, AND THE LAND TRANSPORTATION AND
TRAFFIC CODE, AND OTHER RELEVANT LAWS

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

SECTION 1. Short Title. - This Act shall be known as the “Rideshare
Support Company Act."

SECTION 2. Declaration of Policy. - It shall be the policy of the State
to provide and to promote adequate and efficient modes of public transport;
to protect the commuting and the general public; to encourage free enterprise
and economic development; and, to promote the use of technological
innovations for the welfare of the citizenry.

SECTION 3. Definitions. As used in this Act, the following terms shall
refer to:

a) Digital network — an online enabled technology application service,
website, or system that enables a rideshare network rider to coordinate

prearranged ride with a rideshare network driver.


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b)

©

d)

e)

Prearranged ride — the provision of transportation by a rideshare
network driver to a rideshare network rider beginning when a rideshare
network driver accepts a request made by a rideshare network rider by
means of a digital network. A prearranged ride does not include a
shared expense carpool or vanpool arrangement by another type of
arrangement or service in which the driver receives a fee that does not
exceed the driver’s costs associated with provided the ride.

Rideshare network driver — an individual who i) satisfies the
requirements provided in Section 5 of this Act, ii) receives requests for
prearranged rides from potential passengers by means of a digital
network, and iii) uses a rideshare network vehicle to offer or provide a
prearranged ride for compensation upon connection through a digital
network.

Rideshare network rider- an individual who has obtained an account to
use a digital network, or another individual designated by the account
holder, to receive a prearranged ride.

Rideshare network vehicle — a vehicle seating less than fifteen (15)
passengers, including but not limited to any passenger automobile,
truck, motorcycle, or similar vehicle, that is owned, leased, rented, or
authorized for use by a rideshare network driver and that has been
approved by a rideshare support company to be used for prearranged
rides.

Rideshare support company — a duly registered sole proprietorship,
partnership, or corporation organized under the laws of the Philippines

or business otherwise authorized to do business in the Philippines that


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supports the provision of prearranged rides provided by rideshare

network drivers, including by gathering information from drivers and

verifying compliance with requirements set forth in Section 5 of this

Act and providing other support services to rideshare network drivers.

SECTION 4. Permit.

a) A person shall not operate a rideshare support company without first
having obtained a certificate of accreditation from the Land
Transportation Franchising and Regulatory Board (LTFRB)
pursuant to this ACT; Provided, That any entity performing the
functions of a rideshare support company operating in the
Philippines before the effective date of this Act may continue
operating while the LTFRB creates an accreditation process
pursuant to this Act and during the pendency of any application
submitted pursuant to this process, as long as such application is
submitted within ninety (90) days after the process is formally
established and the LTFRB has begun accepting applications.

b) The LTFRB shall issue an accreditation to each rideshare support
company applicant that meets the following requirements:

i) Has established a process, consistent with Section 5, to enable
individuals to become rideshare network drivers;

ii) Requires criminal history checks for individuals seeking to
become rideshare network drivers;

iii) | Provides evidence that it meets the insurance requirements set

forth in Section 7;


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iv)

v)

©)

Provides an undertaking to comply with all obligations in this
Act imposed on a rideshare support company; and
Pays a fee of Ten Thousand Pesos (Php10,000.00) to the

LTFRB, which shall be due annually.

An accredited rideshare support company shall have authority to

permit an individual to act as a rideshare network driver, provided

that the requirements set forth in Section 5 are fulfilled by such

individual. An individual permitted to act as a rideshare network

driver by an accredited rideshare support company shall not be

required to obtain any additional license or authorization from the

LTFRB in order to provide prearranged rides.

SECTION 5. Rideshare Network Driver Requirements.-

a) Before allowing an individual to act as a rideshare network driver:

)

2)

The individual shall provide information to the ride share

support company, which includes information regarding his

or her address, age, driver’s license, motor vehicle

registration, automobile liability insurance, and such other

information required ride share support company; and

the rideshare support company shall either:

i) conduct or have a third-party conduct a criminal
background check for each individual, or

ii) require each individual to obtain clearance or a
criminal history report from the National Bureau of
Investigation (NBI) and provide it to the rideshare

support company.


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b) A rideshare support company shall only permit an individual to act

as a rideshare network driver if the individual:

1) Has not been convicted of any felony, including but not limited
to crimes against persons within the past seven (7) years, as
shown by a criminal history report procured pursuant to
paragraph (a)(2)(i) of this Section; or clearance or other similar
document issued by the NBI, as appropriate;

2) Possesses a valid non-professional or professional driver’s
license;

3) Provides proof of valid registration for the motor vehicle(s) used
to provide prearranged rides;

4) Provides proof of compulsory third party liability coverage for
the motor vehicle(s) used to provide prearranged rides; and

5) Is at least eighteen (18) years of age.

c) There shall be no additional requirements that an individual must

satisfy in order to act as a rideshare network driver.

SECTION 6. /dentification of Rideshare Network Drivers and
Vehicles.- A rideshare support company shall ensure that a picture of the
rideshare network driver and the license plate of the motor vehicle utilized for
providing the pre-arranged ride is displayed to the rideshare network rider
before the rider enters the vehicle.

SECTION 7. Insurance Requiremenis.- A rideshare support company
or rideshare network driver shall ensure that during each prearranged ride a

rideshare network vehicle is covered by personal accident insurance


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underwritten by a licensed Philippine insurer for passenger injuries arising
from motor vehicle accidents during a prearranged ride in an amount of not

less than Two Hundred Thousand Pesos (Php200,000.00) per passenger.

SECTION 8. Operational Requirements.

a) If a fare is collected from a rider for a prearranged ride, the
rideshare support company shall ensure that the fare or fare
calculation method is disclosed to the rideshare network rider. If
such fare calculation method is so disclosed, there shall be no limits
or restrictions on the type or amount of fare that may be collected
and for the avoidance of doubt, Congress hereby recognizes that for
all prearranged rides provided by rideshare network drivers:

1) There are no minimum or maximum fares or rates;

2) A flat fare or rate may be charged;

3) The fares or rates may be based on time and distance;

4) Fares or rates may adjust dynamically from trip to trip; and
5) Fares or rates shall not be regulated further by the LTFRB.

b) A rideshare network driver may travel on any route selected by the
rideshare network rider, including those with predetermined drop-
off and pick-up points, or on a route selected by the rideshare
network driver.

¢) There shall be no minimum, maximum, cap, limit, or other
restriction on the number of rideshare network drivers or vehicles
that may operate overall, at a particular time, or in a particular
location.

SECTION 9. Electronic invoices.


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a) Following the completion of a prearranged ride, a rideshare network
driver shall ensure that an electronic invoice is transmitted to the
rideshare network rider that includes:

1) The origin and destination of the trip;

2) The total time and distance of the trip;

3) The first name of the rideshare network driver;

4) The name of the affiliated entity operating the digital network;
and

5) An itemization of the total fare paid, if any.

b) A rideshare network driver may directly provide such receipt to a
rideshare network rider, or may designate the affiliated entity
operating the digital network to provide such receipt to the rider.

c) Provided that a receipt that complies with paragraph (a) of the
section has been issued to the rideshare network rider and a copy is
retained by the rideshare network driver or the driver’s designee, the
requirements in Sections 113, 232, 237, and 238 of Republic Act
No. 8424, otherwise known as the Tax Code of the Philippines are
deemed satisfied, the receipts issued pursuant to paragraph (a) of
this section are deemed to be registered receipts in accordance with
Section 237 of Republic Act No. 8424, and no additional receipts
are required to be issued in connection with the prearranged ride.

SECTION 10. No Other Carriers.

a) Rideshare support companies, any affiliated entity operating the
digital network, and rideshare network drivers are not public

services, public utilities, common carriers, or public


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telecommunications entities as defined in Section 13(b) of

Commonwealth Act No. 146, Civil Code Article 1732, Section 3(b)

of Republic Act No. 7925, or any other provision of law. In addition,

no further registration shall be required of rideshare network
vehicles, aside from their registration with the Land Transportation

Office (LTO).

b) For the avoidance of doubt, Congress hereby recognizes that:

1) By serving rideshare network riders, rideshare support
companies, any affiliated entity operating the digital network,
and rideshare network drivers do not give the public a legal right
to demand their respective services; and

2) Rideshare support companies and any affiliated entities
operating a digital network do not provide transportation
services.

c) No person shall be required to register a rideshare network vehicle
as a for hire vehicle as set forth in Section 7(b) of Republic Act No.
4136 otherwise known as the known as the "Land Transportation
and Traffic Code or any other provision of law, or obtain a certificate
of public convenience before acting as a rideshare network driver or
using a vehicle as a rideshare network vehicle.

d) Section 7(a) of Republic Act No. 4136 is hereby amended to read as
follows:

(a) “Private. — Motor vehicles registered under this classification
shall not be used for hire under any circumstance [.],

PROVIDED, THAT MOTOR VEHICLES REGISTERED

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a)

UNDER THIS CLASSIFICATION MAY BE USED AS
RIDESHARE NETWORK VEHICLES SUBJECT TO
COMPLIANCE WITH THE RIDESHARE SUPPORT
COMPANY ACT AND THE RELEVANT REGULATIONS
TO BE PROMULGATED BY THE LTFRB THAT ARE
CONSISTENT WITH THE RIDESHARE SUPPORT
COMPANY ACT.
SECTION 11. Records. — A rideshare support company shall ensure
that the following records are maintained:
a) Individual trip records for at least one (1) year from the date each
trip was provided; and
b) Individual records of rideshare network drivers at least until lapse of
three (3) years from the time the rideshare network driver ceases
provided prearranged rides.
SECTION 12. Audit procedures; Confidentiality of Records.
For the sole purpose of verifying that a rideshare support company is in
compliance with the requirements of this Act and no more than
annually, the LTFRB shall have the right to visually inspect a sample
of records that the rideshare support company must ensure are
maintained pursuant to this Act. The sample shall be chosen randomly
by the LTFRB in a manner agreeable to both parties. The audit shall
take place at a mutually agreed location. Any record furnished to the
LTFRB may exclude information that would tend to identify specific

drivers or riders.


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b) In response to a specific complaint against any rideshare network
driver, rideshare network rider, or rideshare support company, the
LTFRB is authorized to visually inspect those records described in this
Section that are necessary to investigate and resolved the complaint.
The rideshare support company and the LTFRB shall endeavor to have
the inspection take place at a mutually agreed location. Any record
furnished to the LTFRB by the rideshare support company may exclude
information that would tend to identify specific drivers or riders, unless
the identity of a driver or rider is relevant to the complaint.

c

Any records furnished to the LTFRB under this Act are designated
confidential and are not subject to disclosure to a third party by the
LTFRB without prior written consent of the rideshare support
company, and are exempt from public disclosure.

SECTION 13. Limitations on Rideshare Support Companies.

a) A rideshare support company shall not be deemed to:

1) Control, direct, or manage the rideshare network drivers or rideshare
network vehiles, except where expressly agreed to in a written
contract; or

2) Own or operate a digital network.

b) Rideshare network drivers shall not be deemed to be employed by the

rideshare support company or any affiliated entity operating a digital

network provided that:

1) There are no minimum hours during which a driver must be logged
into the digital network and a driver may choose when and if to log

into the digital network;


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2) There are no restrictions on the rideshare network driver’s ability to
engage with other digital networks; and

3) The are written terms agreed to by the rideshare network driver
which provide that the driver is not an employee.

SECTION 14. Enforcement. —
a) Ifthe LTFRB determines that a rideshare support company has violated
its obligations under this Act, the LTFRB may:

1) Impose against the rideshare support company an administrative
fine in an amount not to exceed Twenty Five Thousand Pesos (Php
25,000.00), if the LTFRB determines that the violation is willful and
endangers public safety;

2) Suspend or revoke the accreditation issued to the rideshare support
company, if the LTFRB determines that there have been repeated
violations that are willful and endangers public.

b) To determine the amount of an administrative fine imposed pursuant to
paragraph (a)(1) of this Section, the LTFRB shall consider:

1) The severity of the violation;

2) Any good faith efforts by the rideshare support company to remedy
the violation; and

3) The history of previous violations by the rideshare support
company.

c) Before any fine is imposed or steps are taken to suspend or revoke a
rideshare support company’s accreditation, the LTFRB shall provide
reasonable notice to the rideshare support company and the opportunity

for a hearing.


SECTION 15. Controlling Authority. Notwithstanding any other
provision of law, rideshare support companies and rideshare network drivers
are governed exclusively by this Act and any rules promulgated by the LTFRB
consistent with this Act.

SECTION 16. /mplementing Rules and Regulations. Within sixty (60)
days from the effectivity of this Act, the LTFRB shall promulgate the
implementing rules and regulations as may be necessary to ensure the efficient
and effective implementation of this Act.

SECTION 17. Repealing Clause. — All laws, decrees, executive orders
and rules and regulations or part or parts thereof inconsistent with any
provision of this Act are hereby repealed, modified or amended accordingly.

SECTION 18. Separability Clause. — If any provision of this Act is
declared unconstitutional, the validity of the remaining provisions hereof shall
remain in full force and effect.

SECTION 8. Effectivity. — This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of general

circulation.

APPROVED.