Republic of the Philippines
House of Representatines
‘Quezon City, Metro Manila

A

Seventeenth Congress
Second Regular Session

HOUSE BILLNo. _8009

Introduced by Representative Jericho Jonas B. Nograles
and Representative Karlo Alexei B. Nograles

EXPLANATORY NOTE

This bill seeks to recognize transportation networking companies
and prescribe requirements, guidelines and standards for their operation.

The Philippines continues to be saddled with a worsening traffic
situation. Traffic jams along the main highways and major roads result not
only in the delay of commuters but also causes economic losses for the
country as a whole. Add to that the inefficiency of the existing mass
transportation systems particularly in urban centers of the country. The
commuting public is severely affected by these problems as they suffer
the from the delay in their daily commute.

Although the primary solution to the traffic situation is still the
improvement of the country’s transportation infrastructure, government
should undertake measures to help alleviate the distress of our
commuters. With the current advancements in technology, it is imperative
for government to recognize the potential and advantages of online-
enabled platforms to spur advancements in the transportation industry.
The emergence of transportation networking companies (TNCs) has
provided commuters with other options in their daily commute. TNCs are
also eyed to help decongest roads by encouraging vehicle owners to
leave their cars at home and instead utilize the services of a TNC, which


could provide efficient service and can be counted on to ensure the safety
of its passengers.

This proposed measure defines the nature of TNCs; prescribes the
requirements for their operation and the registration of their drivers;
provides standards on their safety policies and fare setting procedures;
and identifies the authorized agency that will issue the required permit to
TNCs and regulate their operation. This bill also requires TNCs through
their drivers to issue electronic receipts for passenger safety and taxation
purposes.

The regulation of TNCs is intended to ensure the promotion of the
safety and welfare of the commuting public, and at the same time
maximize innovations in technology and the advantages that TNCs can
offer in helping alleviate the suffering of commuters and promote the
development of the country’s transportation industry.

In view of the foregoing, approval of this bill is earnestly sought

KARLO ALEXEI B. NOGRALES ue JONAS B. NOGRALES


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL noS003

Introduced by Rep. Jericho Nograles

AN ACT RECOGNIZING TRANSPORTATION NETWORK COMPANIES,
PRESCRIBING REQUIREMENTS, GUIDELINES AND STANDARDS FOR THEIR
OPERATION, PROVIDING PENALTIES FOR VIOLATION THEREOF, AND FOR

OTHER PURPOSES

Be it enacted in the Senate and the House of Representatives of the Republic of the
Philippines in Congress assembled:

CHAPTER |.
GENERAL PROVISIONS

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

SECTION 2. Declaration of Policy. It is the policy of the State to provide and to promote
adequate and efficient modes of transportation in the country. To this end, the State
shall enact measures for the regulation of transportation network services to ensure that
the paramount interest of the public is protected and conserved, while encouraging free
enterprise and economic development.

SECTION 3. Definition of Terms. As used in this Act:

(a) “Board” shall refer to the Land Transportation Franchising and Regulatory Board
(LTFRB);

(b) “Passenger” shall mean an individual who uses a transportation network company's
service platform to connect to a driver for transportation network services, including all
other persons who accompany said individual for the duration of such service;


(c) “Personal vehicle” shall mean a motor vehicle that satisfies all of the following
conditions: (i,) owned, leased, or otherwise authorized to be used by the driver; (ii.) not
a public utility vehicle as defined in Republic Act No. 10586 and other related laws;

(d) “Service platform” shall mean any internet site or online-enabled application software
or system that permits the pre-arrangement of transportation network services;

(e) “Transportation network company (TNC)" shall mean an organization, whether a
corporation, partnership, or sole proprietorship operating in the Philippines, that
provides pre-arranged transportation services for compensation using an internet-based
application or digital platform technology to connect passengers and drivers using their
personal vehicles;

(f) “Transportation network driver (TND)’ shall mean an individual who (j.) satisfies the
requirements provided in Section 15 of this Act; (ji.) pays @ fee to a TNC to connect to a
passenger for the purpose of engaging in transportation network services; and (ii.)
operates a personal vehicle to engage in transportation network services for
compensation; and

(g) ‘Transportation network services (TNS)’ shall mean transportation of a passenger
between points chosen by the passenger and that is pre-arranged with a TND through
the use of a TNC’s service platform. The TNS begins from the moment the TND
accepts @ request for transportation on the TNC’s service platform and ends when the
ND completes the transaction on the service platform or when the trip is complete and
the passenger exits the TND’s vehicle, whichever is later.

SECTION 4. Nature of Transportation Network Companies and Drivers. TNDs are
hereby declared as common carriers for purposes of determining the liability and degree
of diligence that must be observed in the course of transportation network services, and
the presumption of negligence in case of breach of contract of carriage shall likewise
apply to them.

TNCs shall be required to exercise the diligence of a good father of a family in the
course of complying with its obligations under this Act and the regulations that the
Board may issue in relation thereto.

CHAPTER Il.
REGULATION OF TRANSPORTATION NETWORK COMPANIES

SECTION 5. Issuance of Permits to TNCs. A person, organization, or entity shall not be
allowed to operate a transportation network company without first obtaining a Permit
from the Board upon compliance with the requirements set forth by this Act and other
reasonable conditions as may be provided by the Board.


SECTION 6. Application for Permit. The Board shall grant a Permit to a TNC upon
determination that all of the following requirements are met:

(a) Submission of application in the form prescribed by the Board. The application shall
include the applicant's name, address, tax identification number, and any other
information that the Board may deem necessary to assess the applicant's qualification;
(b) Proof that the applicant is licensed to do business in the Philippines if the applicant
is a foreign corporation;

(c) Resident agent for purposes of service of process in the Philippines; and

(d) Payment of an application fee to be set by the Board upon filing of the application.

The applicant shall notify the Board of any material change in the information included
in the application not later than fifteen (15) days after the change occurs. The Board
shall prescribe a form for the disclosure of material changes.

SECTION 7. Term and Renewal of Permit. A Permit issued by the Board shall be valid
for a period of two (2) years unless sooner revoked by the Board for any of the causes
provided under Section 23

The Board shall prescribe the form and requirements necessary for the renewal of a
permit.

CHAPTER Il.
OPERATION OF TRANSPORTATION NETWORK COMPANIES

SECTION 8. Requirements for Transportation Network Companies. A transportation
network company shall

(a) Create an application process for a person to apply for registration as a
transportation network driver;
(b) Maintain an updated database of the TNC’s transportation network drivers;
(c) Maintain a website with the following information:
i, The TNC's customer service telephone number and/ or electronic mail address;
il. The TNC’s zero tolerance policy established under Section 9 of this Act;
il, The procedure for reporting a complaint about the TND;
(4) Conduct, or have a third party conduct, a safety inspection of the personal vehicle
that a TND will use before the motor vehicle may be used to provide transportation
network services and ensure compliance with the TNC’s vehicle safety policy
established under Section 10 of this Act; and
(e) Maintain an insurance policy as required under Section 17 of this Act.


SECTION 9. Zero Tolerance for Drug or Alcohol Use. Each TNC shall develop and
implement a policy prohibiting any TND from using drugs or alcohol or any other
substance that may render the TND incapable of driving safely while the TND is
engaged in transportation network services for the TNC or is logged onto the TNC’s
service platform, The TNC shall:

(a) Establish the complaint procedures for reports of suspected violations of the zero
tolerance policy;

(b) Conduct an investigation upon receipt of a complaint that the TND violated the zero
tolerance policy required under this Section and immediately suspend a TND's access
to its service platform for the duration of the investigation; and

(c) Maintain records relevant to the requirements of this Section for the purposes of
enforcement.

SECTION 10. Vehicle Safety Policy. TNCs shall adopt a vehicle safety policy to ensure
the comfort and security of passengers using transportation network services. Such
policy shall observe the following minimum standards:

(a) The transportation of passengers in numbers exceeding the manufacturer's
designed seating capacity shall be prohibited, notwithstanding the state’s policy of
encouraging ride-sharing;

(b) The vehicle must be road-worthy and compliant with vehicle emission standards but,
in any case, must not be more than ten (10) years old from date of manufacture; and

(c) The vehicle must be equipped with proper tools and equipment.

SECTION 11. Fare Setting and Disclosures. A TNC is hereby authorised to set fares but
shall disclose the fare calculation method, the applicable rates being charged, and the
option for an estimated fare to a passenger before the passenger arranges a trip with a
TND.

If a TNC utilizes dynamic pricing to incentivize drivers in an effort to maximize the
supply of available vehicles on the service platform to match the demand for rides and
increase reliability, the service platform must:

(a) Provide clear and visible indication that dynamic pricing is in effect prior to
requesting a trip;

(b) Include @ feature that requires passengers to confirm that they understand that
dynamic pricing will be applied in order for the trip request to be completed; and

(c) Provide a fare estimator that enables the user to estimate the cost under dynamic
pricing prior to requesting the trip.


Notwithstanding the preceding paragraph, dynamic pricing may be suspended during
abnormal market disruptions, such as but not limited to any change in the ground
transportation market, whether actual or imminently threatened, resulting from severe
weather disturbances and natural calamities, failure or shortage of electric power or
other source of energy, strike, civil disorder, war, military action, national or local
emergency, or other cause of an abnormal disruption of the market resulting in a
disaster or the declaration of a state of emergency.

SECTION 12. Electronic Receipt. Within a reasonable time after the completion of a trip,
a_ TNC shall transmit an electronic receipt to the passenger's electronic mail address or
mobile application containing the origin and destination of the trip; the total time and
distance of the trip; and breakdown of the total fare paid, if any.

SECTION 13. identification of Transportation Network Drivers and Vehicles. TNCs shall
make available to each prospective passenger, on its service platform, the photograph
of the TND and the license plate number and description of the TND’s vehicle. TNDs
shall display the TNC’s trade dress on the vehicle at all times it is being used to provide
transportation network services.

SECTION 14. Confidentiality of Passenger Information. TNCs shall not disclose a
passenger's personally identifiable information to any other person unless:

(a) The passenger consents to the disclosure;

(b) The disclosure is required by a legal obligation; and

(c) The disclosure is necessary to protect or defend the terms of use of the service or to
investigate a violation of those terms.

In addition, a TNC shall be permitted to share a passenger's name and telephone
number with a TND for the sole purpose of facilitating communication between the
passenger and the driver regarding pre-arranged trips. TNCs shall prohibit the use by
TTNDs of a passenger's name, telephone number, or other personal information for any
purpose other than those listed in this Section,

SECTION 15. Requirements for Transportation Network Drivers. An individual may
submit an application to a TNC for registration as a TND.

(a) Before approving an application, a TNC shall:
i, Require the individual to submit an application that includes at least all of the
following:
a. The individual's name, address, and age;
b. _ Information on the individual's driver's license;


c. Proof of motor vehicle registration for the personal vehicle the
individual will use to provide TNS through the TNC;
d. Proof of availability of an off-street parking space for the vehicle that
he will use to provide TNS; and
e. Proof of motor liability insurance coverage as required under Section
17 of this Act.
il, Conduct a review of the individual's driving history; and
Iii, Conduct, or have a third party conduct, a criminal background check for the
individual.

(b) A TNC shall not approve an application submitted under subsection (a) of this
Section and shall permanently disqualify an applicant who:
i. Is below eighteen (18) years of age;
ii, As shown in the criminal background check required under subsection (a) (ii)
of this Section, has been convicted within the past five (5) years of any felony;
iii, As shown in the driving record review required under subsection (a) (ii) of this
Section, has been found to have committed, within three (3) years prior to the
application, any violation of laws, rules and regulations governing land
transportation;
iv. Does not possess a valid driver's license;
v. Does not possess proof of motor vehicle registration; and
vi. Does not possess proof of motor vehicle liability insurance.

A person whose application as TND has been approved shall be issued a TND
Certificate which shall contain the name, address and picture of the driver, and the
registration plate number of the vehicle that he will use. The form of the certificate shell
be approved by the Board

Nothing in this Section shall be interpreted to prevent a TNC from imposing additional
standards.

SECTION 16. Drivers as Independent Contractors. TNDs shall be independent
contractors and not employees of the TNC if all of the following conditions are met:

(a) The TNC does not prescribe specific hours during which a TND must be
logged into the TNC’s platform;
(b) The TNC does not assign a TND particular territory in which to operate;
(c) The TNC does not restrict a TND from engaging in any other occupation or
business; and
(d) The TNC and the TND agree in writing that the driver is an independent
contractor of the TNC.


Section 17. Insurance Requirements. TNCs and TNDs shall both maintain insurance
policies to cover claims for incidents involving vehicles and drivers while they are
providing transportation network services. The Board shall determine, upon consultation
with stakeholders, the insurance coverage, including the types of coverage and the
limits for each coverage, that TNCs shall maintain during the validity of their permit.

In every instance where insurance maintained by a TND has lapsed, failed to provide
the required coverage, denied a claim for a required coverage, or otherwise ceased to
exist, the insurance maintained by a TNC shall provide the required coverage.

A TNC shall neither require nor include a hold harmless or indemnification clause in the
terms of agreement with a TND. Such clause, if included in the agreement, shall be an
absolute nullity.

In the event of an accident, a TND shall provide insurance coverage information directly
to interested parties, insurers and investigating police officers, upon request.

Section 18. Street Hails. A TND may not solicit or accept street hails or otherwise
provide transportation for compensation that are not pre-arranged through a TNC's
service platform.

Section 19. Cash Payments. A TND may not solicit or accept cash payments or tips
over and above the fare calculated by the TNC’s service platform and refiected in the
electronic receipt required under Section 12.

Section 20. Fleet Service. TNCs shall not be allowed to have their own fleet service or
be authorized to enter into an agreement with a fleet operator to provide transportation
network services. For purposes of this Act, a person who operates more than five motor
vehicles shall be considered a “fleet operator" and shall not be registered by the TNC
with its service platform.

Section 21, Tax Treatment. The Bureau of Internal Revenue shall determine the tax
liability of TNCs and TNDs and provide the appropriate guidelines for compliance
therewith,


CHAPTER IV.
ENFORCEMENT

Section 22. Regulatory Authority. The authority of the Board shall be limited to the
issuance of permit to and regulation of TNCs to ensure compliance by TNCs with the
provisions of this Act. Such authority shall not include jurisdiction to adjudicate private
causes of action arising from the provision of transportation network services.

Section 23. Disciplinary Proceedings. The Board, after due notice and hearing, may
deny an application for a permit, limit, suspend, or revoke a permit if the TNC:

(a) Makes a material misrepresentation in any application filed under this Act or
rules of the Board;

() Fails to comply with the provisions of this Act or any rule promulgated
pursuant to this Act;

(c) Violates any other law that substantially relates to the operation of TNCs;

(d) Fails to cooperate with the Board, or fails to timely respond to a request for
information by the Board, in connection with an investigation pursuant to this Act;
or

(e) Fails to maintain the qualifications for a permit.

In addition to denial of application or other action under the* immediately
preceding paragraph, the Board may assess against a TNC for each violation
enumerated thereunder, a fine not exceeding One Hundred Thousand Pesos
(P100,000,00).

Section 24. Penalties. The Board shall determine the amount of the administrative
penalty to be imposed on a person, firm, corporation or entity found violating the
provisions of this Act, after considering the following factors:

(a) The seriousness of the violation or failure to comply, including the nature,
circumstances, extent, and gravity of the violations, and the harm or injury that
may arise as a result of the violation;

(b) The history of contraventions of or failure to comply;

(c) The efforts made to correct the violation; and

(4) Any other factor that may be just and reasonable under the circumstances

Section 25. Fees and Other Charges. The TNCs shall be subject to an annual
supervision fee, to be determined by the Board and subject to the approval of the
Secretary of the Department of Transportation. The Board shall promulgate rules and
regulations governing the collection of such fees, which shall likewise be reviewed


periodically and any proposed increase shall be published in two (2) newspapers of
general circulation

Section 26. Records. All TNCs shall maintain passenger trip records for at least least
one (1) year from the date the trip was completed. TNCs shall also maintain all records
concerning each TND for at least two (2) years after the date on which the TND ceases
to engage in transportation network services for the TNC.

The Board shall have the authority to examine records of TNCs, for the purpose of
enforcement of this Act, including a random sample of the TNC’s records related to pre-
arranged rides and TNDs. Such examinations shall be conducted during working hours
and shall not occur more than two times per year unless necessary to investigate a
complaint. Records obtained by the Board, pursuant to this Section shall be kept
confidential, except as may be required by Law.

Section 27. Reportorial Requirement. A transportation network company shall transmit a
quarterly report to the Board providing an accounting of the number of vehicles it has
registered to operate, number of trips provided, estimated number of passengers
served, and any other information that the Board may deem necessary for the effective
‘enforcement of this Act.

CHAPTER V. .
FINAL PROVISIONS

Section 28. Implementing Rules and Regulations. Within sixty (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.

Section 29. Separability Clause. If any provision or part hereof is held invalid or
unconstitutional, the remainder of the provision not otherwise affected shall remain valid
and subsisting

Section 30. Repealing Clause. Any law, presidential decree or issuance, executive
order, letter of instruction, administrative order, rule or regulation contrary to, or
inconsistent with, the provisions of this Act is hereby repealed, modified or amended
accordingly.

Section 31. Effectivity. This Act shall take effect after fifteen (15) days following its
publication in at least two (2) newspapers of general circulation.

Approved.