This will slash the capacity of both ride sharing companies to 10%
In a stunning move, the Land Transportation Franchising and Regulatory Board has ordered both Uber and Grab to remove all drivers that are operating without a permit or franchise from their system. This is a huge blow to both ride sharing companies because a large majority of their drivers do not have a franchise to operate, since the LFTRB themselves halted the processing of all applications for transport network vehicles (TNVs) last year.
Motoring journalist James Deakin estimates that this will slash the capacity of both Uber and Grab to a mere 10%, since many of their drivers have not been issued a franchise to operate. Previously, new drivers simply utilized the 45-day provisional authority to operate by the LTFRB, which they had to renew once the 45-day grace period is up.
The order becomes executory come July 26, which means getting a lift via Uber and Grab from that date on will be almost impossible given rider demand. Most drivers and operators for both Uber and Grab will likely not risk getting nabbed by the authorities, since the monetary penalty for driving without a franchise is a steep Php 120,000 for the first violation.
It’s interesting to note that the problem with “colorum” Uber and Grab drivers was caused by the LTFRB themselves by refusing to process permits of drivers in the first place. Most people overwhelmingly choose either Grab or Uber for their transportation needs over a regular taxi. Instead of solving problems like picky taxis and reckless bus drivers, it looks like the LTFRB has zeroed in on the one thing that makes commuting in the city bearable. Nice job guys.