* This is my article in BusinessWorld on April 11, 2017.
The sharing economy is among the wonderful new inventions
as humanity innovates with more modern technology. Technology companies (not
transport firms or hotels) now allow private motorists to transport passengers
and private homeowners can take guests and visitors for a fee via Airbnb.
There are two major advantages of tech companies in land
transportation like Uber, Grab, and Lyft. First, transparency between the
driver and passenger/s.
Since both drivers and passengers have accounts with
these tech companies officially called transportation network vehicle services
(TNVS), they can identify each other -- using car model and plate number
details -- even before the trip begins. As a result, problems like hold-ups and
sexual attacks are minimized under this scheme.
Second, passenger convenience. Passengers need not bring
a car and brave the traffic, look for parking later, and privately owned cars
are generally cleaner than taxi and drivers tend to be friendlier than the
average taxi drivers.
There is an interesting study comparing Uber, Grab and
conventional taxis done last year by UP Civil Engineering graduate students and
professor. The authors got 18 respondents for a travel diary survey and take
trips for 30 days. Then they also conducted an availability survey to measure
the number of available vehicles of Uber, Grab, and Taxi at a specified time
and location. The study has six tables, I summarized the results for Tables 2,
3 and 6 below.
The numbers show the following:
1. Conventional taxis have (a) lowest ratings by
passengers, (b) highest percentage of complaints, more than 3x that of
complaints with Grab and Uber, (c) 2nd to Grab in trip rejections, and (d)
lowest cost for 10 trips, though the difference is not high compared with Uber.
2. Grab cars have (a) highest reliability and
availability of vehicles, (b) highest cost per kilometer, (c) lowest % of
complaints but small difference with Uber, (d) longest booking time, mainly due
to (e) highest trip rejections, 2x that of conventional taxis and 21x that of
Uber.
3. Uber has (a) fastest travel speed, (b) lowest
passenger cost per kilometer, (c) highest passenger ratings though small
difference with Grab, (d) lowest booking time but also (e) longest waiting time
before being picked up, and (f) lowest trip rejection, almost zero.
There seems to have some inconsistency in the Uber data:
it has the fastest travel speed in kph yet it has the longest travel time to
cover a slightly longer distance than those covered by taxis and Grab.
Nonetheless, it is a good study, congratulations to the three authors.
Now the problem is with the government regulator, the
Land Transportation Franchising and Regulatory Board (LTFRB).
Since July 2016, it has stopped accepting applications
for TNVS.
As a result, recent cars that have registered with Grab
and Uber since that temporary ban may be subject to state harassment.
The LTFRB imposes multiple bureaucratic requirements that
involve around 16 to 21 permits from various government agencies. These include
tax clearance from the BIR, business permit from DTI and LGUs, among others.
The usual requirements by Uber and other ride-sharing
companies for their partner drivers are only four: having their own vehicle, a
driver’s license, a background check, and insurance coverage for passengers.
One result of these multiple bureaucracies is fewer
supply of TNCs drivers and cars compared to the big and rising passenger
demand. Until end-2016, there were only around 7,000 Uber drivers in Metro
Manila vs. some 682,000 registered Uber riders.
There is one important move that the LTFRB can do:
rescind and reduce many of those multiple requirements to allow more Uber and
Grab vehicles on the road, and make these fewer requirements be available to
conventional taxis too. This may be done via administrative order.
If this will require legislation, Congress should heed
the clamor of the citizens and passengers for safer, more convenient rides.
Government should learn to step back from too much
bureaucratism and recognize the ingenuity and innovation of the sharing
economy. Providing safe transportation to people who do not own cars or those
who leave their cars at home is not a crime that should be slapped with
multiple permits, fees and bureaucracies.
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See also:
BWorld 121, The PH tax reform bill and tax policies in East Asia, April 10, 2017
BWorld 122, Six more myths in the mining debate, April 13, 2017
BWorld 123, Drug-related murders and criminal justice in Asia, April 23, 2017
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