LTFRB to determine fares of transport network vehicles

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This story was updated to include statements from LTFRB and Grab Philippines.

Metro Manila (CNN Philippines, June 11) — The Land Transportation Franchising and Regulatory Board (LTFRB) can now regulate fares of transport network companies (TNCs) based on a department order signed by Transport Secretary Arthur Tugade on Monday.

The fares will be set after a public hearing or in consultation with the TNCs and transport network vehicle services (TNVS).

LTFRB board member Aileen Lizada also said full regulation and supervision by the LTFRB is "including but not [limited] to application and approval or denial of the franchise, setting of... routes, operating conditions, imposition of fines, [and] suspension and cancellation of franchise."

Tugade said that regulation would help even out the playing field for all stakeholders.

"Kapag pumasok ka sa public transport, may pananagutan ka. Kaya mahalaga na may regulasyon para nababantayan at nasisiguro natin na walang naaagrabyado," he said.

[Translation: When you enter public transport, you have accountability. It's important to have regulations so we can watch over (everyone) and make sure nobody is aggrieved.]

LTFRB Chairman Martin Delgra III said the agency is ready to step up to its new responsibility.

"The LTFRB has been engaging with TNCs and TNVS operators and drivers far more often than any other group over the past year," said Delgra. "It is because we see their value, and because we believe that if done right, they will make a big difference and our commuters will ultimately benefit."

The regulatory board is also processing franchise applications in an effort to keep colorum TNVS off the road.

Lizada also said full regulation and supervision by the LTFRB is "including but not [limited] to application and approval or denial of the franchise, setting of... routes, operating conditions, imposition of fines, [and] suspension and cancellation of franchise."

Regulators previously had no direct hand in regulating fares. Department Order 2015-011 provides TNVS fares were set by the TNC, "subject to oversight from the LTFRB in cases of abnormal disruptions of the market."

They could only step in to set fares in an emergency situation such as bad weather, strikes, and a failure or shortage of electric power.

The LTFRB previously capped TNC surge, or extra fee when TNVS supply falls short of demand, during the holiday season in 2016. When ride-hailing firm Grab bought Uber and became a monopoly earlier this year, land regulators again stepped in to temper fares.

Since then, new TNCs have entered the market.

Grab Philippines said on Monday that it has yet to see the department order, but assures compliance.

"We also recognize and reiterate our deference to the authority of the [LTFRB], and we will continue to abide by the regulations issued by the Board," Grab Country Head Brian Cu said in a statement.

Other TNCs also welcomed the order.

MiCab and GoLag said regulation would help "[create] an even playing field" for the companies. Owto hoped that all industry players will be treated fairly.

"We are not against this full regulation policy as long as the same be imposed and exercised fairly and equitably, which we do not doubt the LTFRB will do," Owto legal counsel Eloisa Bayani said.

LTFRB will meet with accredited TNCs later in June to discuss the order.

CNN Philippines Correspondent Xianne Arcangel contributed to this report.