It's not Uber yet: LTFRB lacks basis for fines against Uber and Grab

It’s not Uber yet: LTFRB lacks basis for fines against Uber and Grab

In the past few weeks, we saw Uber and Grab get fined P5,000,000.00 each. The LTFRB hit them with this fine because they disobeyed an order to suspend acceptance of applications for private cars to join their transportation app network and become a TNVS (transportation network vehicle service).

About two weeks ago, Uber was again hit with a penalty – this time a 30-day suspension. But in the late afternoon of Friday, the LTRFB issued a new order. This time, it was informing Uber that it could cut short its suspension upon payment of the amount of P190,000,000.00 penalty. Uber had 19 more days’ suspension – so that’s a penalty of P10,000,000.00 per day including weekends, holidays, and stormy days.

Here is a question several lawyers are asking while scratching their heads:

How in the world did they come up with these fines? From what existing law or issuance? Uber’s all-new, revised, converted penalty of P190,000,000.00 has  no legal basis or precedent either in administrative law or criminal law. Nothing in our law books ever allowed a converted penal sanction.

After weeks of reading going through literally (yes, literally) every department issuance since 2012 to the present, I can tell everyone that I cannot find any legal ground for the penalty imposed on Grab and Uber. I also went through several circulars issued between 2003-2005. In fact, I wanted to go as far back as 1997, but no such regulations were available, and I found out after much searching and cross-referencing that the particular 1997 department order I was looking for did not contain anything that could serve as the basis for those ridiculously large amounts.

Let’s talk about the basis for the punishment. Right now, Uber and Grab are considered by the LTFRB as common carriers.

Is there a legal basis for punishing common carriers? YES, there is. Is there a structure or schedule of penalty fees or description of other penalties other than fines? YES, there is. Has this schedule of penalties been properly published in the newspapers and in the Office of the National Administrative Register (ONAR)? YES, it has. And in fact, there are multiple schedules of penalties, all of which have been published in the ONAR. Are the penalties against Uber and Grab in accordance with these penalties? NO, they are not. Are the penalties against Uber and Grab published in the ONAR? NO, they are not.

What does this mean?

It means that there is absolutely no legal basis for those penalties.

The only legal bases for LTRFB penalties will show you a range between P5,000.00 for the first offense, P10,000.00 for a second offense, and P15,000.00 for a third offense. There are also other penalties in the amounts of P50,000.00, P75,000.00, P100,000.00, and P200,000.00 for various offenses. And that’s about it. Any who doubt me can research this for themselves. I’ll even make it easier by providing three links:

 

(1) The LTO website where you will find Joint Administrative Order No. 2014-01 entitled, “Revised schedule of fines and penalties for violations of laws, rules and regulations Governing Land Transportations”

(2) The LTFRB website also where you will find the same JAO, Joint Administrative Order No. 2014-01 entitled, “Revised schedule of fines and penalties for violations of laws, rules and regulations Governing Land Transportations”

(3) The official list of LTFRB fines and penalties published in previous issuances.

 

People might note that these penalties were published before Uber and Grab placed themselves under LTFRB regulation. That is true, but these provisions apply to common carriers. If they are considered common carriers, then these provisions apply.

People may also note that there seems to be no punishment for what Uber and Grab did. If you are one of those people, then CONGRATULATIONS!!! You now know exactly why the penalty has no legal basis. It is because there is no monetary penalty provided at all in any law or issuance governing Uber and Grab.

Uber and Grab cannot be penalized with those ridiculous amounts. It was something the LTFRB all of a sudden made up and imposed on them. You’ll note in the interviews of two particular LTFRB officials after imposing those fines that they cited no legal basis in coming up with it. Not even their Order gives the legal provisions they used as the basis for the fines.

With regard to the P190,000,000.00 fine against Uber, an official who was interviewed also did not give any legal basis for the penalty, but admitted instead that the amount was based on how much money Uber was allegedly making. Hello??? There is no law in the Philippines on common carriers that give penalties that are dependent on how much money a company is making. Neither is there any rule or regulation to that effect.

If a rule or regulation imposing a penalty is not published in the ONAR, it cannot be imposed on anyone.

Under the Philippine law a penalty may only be imposed if it is written in a law. If the law requires an administrative agency to prescribe implementing rules, regulations, and penalties, then the Administrative Code provides that a person may only be penalized under those rules and regulations if it has been published in the ONAR at the UP Law Center. In the case of the LTRFB, ALL of those it regulates are governed by implementing rules and regulations. This means that there is NO PENALTY that can be imposed on any regulated persons UNTIL the implementing rule is published in the ONAR.

In the case of Uber and Grab, there is no such law or implementing rule published in the ONAR. Hence, this punishment is outside the law. It is illegal and arbitrary.

Laws and implementing rules and regulations give notice to all parties as to what each others’ obligations and rights are, as well as any penalties when one violates those rights. If there is no law or regulation, then there can be no penalty imposed on a person because none of the parties would be properly informed. In legalspeak, this is called a denial of due process.

We must realize that regulation is not just for the benefit of the commuter. It is also for the benefit of the app owner, the small business owner who owns the cars, the drivers, and even the government.

In case of the government, it keeps the officials from becoming corrupt or abusive. By providing standards or set amounts for penalties, a lot of discretion is taken away from a government official which would remove much temptation to profit by giving lower or higher penalties to those he favors or disfavors, depending on the circumstances. It is for the benefit of the commuter because the government can regulate the service provider to ensure their safety and convenience. It protects the app and business owners by ensuring that they know what are allowed and not allowed, so their actions may be guided accordingly.

Without those rules, the government can act however it wishes and destroy an industry to favor another.

Does the LTRFB really know what it is doing? Or worse… does it know exactly what it is doing and maliciously punishing Uber and Grab with the intent of running their business to the ground? We hear reputable media outlets citing LTFRB Chief Martin Delgra say that he wants more taxis on Metro Manila roads despite knowing the abuses of taxi drivers, and in face of the admission of the taxi lobby that these abuses are prevalent. It is hard not to put these incidences together without scratching your head after.

4 replies
  1. Sonny C Toledo
    Sonny C Toledo says:

    do put that money to build a Fly over at Nichols interchange ..grabeh perwisyo .duun going to T3 NAIA .. PPP . If kulang ang Fund ..kesyo ma Punta sa Wala . ..m fir the benefit of All Tge Road Usersssss.

    Reply
  2. Manny
    Manny says:

    That’s why some foreign investors don’t want to invest in the Philippines due to these kind of shenanigans…..why can’t the government control this ?

    Reply

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