Common carriers?

#Uber
#Grab

Why grow interest upon the issues below?  Well,  this will help us enlighten our minds on how the modern world has grown so much that our own laws have been left behind - sleeping cold in the memories of our congressmen. This will help urge each one of us to study the vanishing gap of the cyber and physical life and some of its effects in our existing laws so that we can be prepared for all possible modernization measures to cope up with the changing times.

To start:

LTFRB faces  true difficulties with how to regulate the Grab and Uber Companies. Surely, there is no question that LTFRB is clothed with the power to regulate common carriers in our country. However, there is this cloud of doubt on how to classify the earlier mentioned companies -whether they are embraced in our ancient definition of common carriers or not.
 So we have now the following questions:
Can we classify Uber and Grab as common carriers?
 Does LTFRB have jurisdiction to regulate these companies in the first place?
If these companies cannot be regulated by LTFRB,  is there any way to regulate these comapnies.

I guess most of you have already answered the question. And I bet you have classified the comapnies as common carriers just as how the LTFRB contended.

I humbly submit that such contention is unfounded and without legal leg with which to stand on.

Who are common carriers? Art. 1732 of the New Civil Code which took effect on August 30, 1950 or roughly 67 years from now provides: Common carriers are persons,  corporations, firms, or associations engaged in the business of carrying or transporting passengers or goods or both,  by land, water,  or air,  for compensation,  offering their services to the public.

Our early definition of common carriers way back in early 50's has been confined to carriage of passengers or goods or both thru trains,  jeepnies, buses, boats and planes. That is the prevailing condition during those times. Come the case of Industrial Corp. Vs. Court of Appeals, we have accepted a way higher meaning of common carriers such it includes now those pipeline operators who are transporting oil and other petroleum products through its pipes. We have also considered the Electricity distributors as common carriers. The electricity has been considered as goods.  True enough, the law does not make any distinction whether the transportation of passengers or goods be by motor vehicle.

Having said that,  does the definition include now the services provided for by Grab and Uber companies to qualify them as common carriers?

Uber was launched in 2010 as an aggregator of “black car” services in San Francisco. It has quickly become one of the world’s most influential companies.  Startups pitch venture capitalists on “the Uber for x,” as they once talked of imitating Amazon.com or Google. Worth over $50 billion as of mid-2015, Uber is the world’s most highly-valued, venture-backed private company. It now operates in over 300 cities worldwide and has over one million drivers in its network. Uber’s revenues are already in the billions of dollars.(KEVIN WERBACH,  Associate Professor of Legal Studies and Business Ethics, The Wharton School, University of Pennsylvania., werbach@wharton.upenn.edu.)

Uber is the most prominent example of a deeply important trend. However, it is widely misunderstood. Descriptions of Uber and its competitors usually lump them as examples of “the Sharing Economy” or “Collaborative Consumption” because they encourage private drivers to share their cars with paying passengers on an on-demand basis, or the descriptions focus on the functionality of its smartphone-based, ride-hailing app. However,  at its core, Uber is an Internet-enabled network or simply a software.
There is a misconception.  The public actually believe that the Grab and Uber and the private-vehicle owners offering transport services are the same and one entity. They are not.

Hiding behind the "cloud" or "internet" as layman understood it, Uber operates as a software business allowing exchange of information of its users - the private car owners who utilizes the app and the riding public.

The service provided by Grab and Uber can hardly be considered, as yet, as public utility under our existing laws because it supplies merely a venue in the cyber-world of exchange of information. It does not transport itself passengers or goods. Being a software company,  it merely offers no more less than data which people can use.  Nothing in our jurisprudence has yet defined "data" as a form of goods.  To hold "data" as a form of goods would surely hold out many other companies such as Facebook, Google, Wordpress, OLX, Twitter, and Youtube, as common carriers, because they also carry data, which is totally absurd.

However, LTFRB has all the powers to regulate the private-car owners who are in the actual engagement of transporting the passengers.  One that holds itself out as ready to engage in the transportation of goods for hire as public employment and not a casual occupation has been used as among the determinative elements of common carrier. Art. 1732 avoids any distinction between person or enterprise offering transportation service on occassional,  episodic,  and unscheduled basis.  Neither does the law distinguish between a carrier offering its services for the general public, that is the community or population and one who offers business only from narrow segment of the general population.

Now to say that private car owners who uses the Grab and Uber app as not common carriers because they only offer in private contract to those who uses the app and not to the general public is clearly not tenable. The fact that it holds out to the segment of population who are app-user public for transportation means they are cyrstal clear embraced in the definition of the law.

The power of the state,  exercised by the LTFRB, to regulate public utilties engaged in transport services hinges on tbe police power in order to promote common good. When private property is used for public purpose and is affected with public interest,  it ceases to be "juris privati" only and becomes subject to regulation.  The regulation is to promote the common good. For example,  with the regulation, state can make sure that these people engaged in transport services will comply with the prescribed requirements for the accomodation of PWD, the standard fares,  and privileges for students.

Submission to regulation maybe withdrawn by the owner by discontinuing use; but as long as use of the property is continued,  the same is subject to public regulation. (RP vs.  Manila Elec. Com. Nov. 15, 2002)

Now. LTFRB, in order to remove the gap as between Uber or Grab and the private car owners, opined that the companies are actually the operators of these transport services and so the employers of the drivers. That is the reason why we hear a lot of news compelling Uber and Grab to comply with labor laws like the prescribed working hours.

This leads us to a way far. The Labor laws  basically define the relation of the employers to their employees and not to the public as users of the services of the employers. To apply labor laws in the main issue is simply absurd. 

Granting arguendo that the comapnies and the drivers are one such that the former holds out as the operator of public convenience, this is where LTFRB is confronted of much larger problem of closing down the whole operation of the companies in our country for failure to comply with the Constitutional requirement for operators of public utility which requires full beneficial ownerahip of 60% of outstanding capital stock and 60% of the voting shares. (Gamboa vs. Teves,  June 28, 2011) Uber and Grab are 100% not owned by Filipinos. They are foreign companies.

The Land Transportation Franchising and Regulatory Board (LTFRB) is the agency created by virtue of Exec. Order No. 202, series of 1987, under the Department of Transportation and Communications (DOTC), which handles the issuance of authority to any entity (corporate or individual) wishing to engage in public land-based transportation service.SEC. 5. provides for the Powers and Functions of the Land Transportation Franchising and Regulatory Board.   Nowhere can we find any power which the agency over regulation of information-sharing.

The goals of LTFRB, which are really noble by themselves, are unimpeachable and certainly fall within the ambits of police powers of the state. Yet the desirability of these ends do not sanctify any and all means for their achievement. There is really a need to update our laws and cloth the right agencies with authority to the emerging needs of police regulations for activities which by far have rendered inutile our ancient and unupdated laws.

If at all,  the best solution to address the existing condition using the available laws and jurisprudence that we have is to directly regulate the private-car owners. To regulate the Grab and Uber company,  we can use the existing taxation laws in order to tax these foreign companies for income derived from sources within the country.

Let us know your own view. Comment down.