Shortly after we had written about carpooling app Wunder getting banned by the Land Transportation Franchising and Regulatory Board last week, the company behind it reached out to us to explain its side of the story and how it believes ride-sharing could be regulated better in the Philippines. During a phone interview with VISOR, company COO Samuel Baker explained that the Germany-based start-up is actively seeking to talk to and cooperate with the LTFRB, but that in order to untangle the current legal mess, a change in the law would be a good idea in their opinion.
To better understand what Wunder is suggesting, it helps to know that the current definition of a transport network company (TNC) as issued by the Department of Transportation was not written from scratch, but was instead adopted almost word-for-word from California. The Golden State is widely recognized as a leader when it comes to regulating ride-sharing, and it made perfect sense to take a proven legal definition and apply it here. The DOTr, however, issued its definition in May 2015 and without giving any guidance on exemptions, while California did add to its rules, in June 2015, 11 ride-sharing exemptions that do not require TNC licensing.
The current Philippine definition of TNC was adopted almost word-for-word from California…but without giving any guidance on exemptions
This lack of guidance on exemptions is what is currently causing so much confusion, with developments such as the MMDA creating a carpool lane and the LTFRB saying that carpooling—even if no money is exchanged—is de facto illegal, creating an impression that in Philippine government, the left hand doesn’t know what the right hand is doing. In reality, it all comes down to how the regulations are worded, as the LTFRB is simply the enforcer of the rules and not the one making them. That job falls upon the House of Representatives and the Senate, which are currently considering a draft to write TNC regulations into law. At the moment, however, this draft also doesn’t include any exemptions and would essentially enshrine the current chaotic status quo into law.
This is where Wunder comes in again: The company is actively calling for Philippine lawmakers to specifically include the exemptions that are foreseen in California law, which allow for essential and nonprofit transportation services for students, employees and patients. If these exemptions were included, there would be clear rules as to who needs to register as TNC and who doesn’t, and anyone wishing to run a nonprofit carpool, for example, would know exactly what he is allowed to do and how much compensation he is allowed to take for it. The California law is quite detailed in this respect and clearly states that “nonprofit” is defined as being no more than the IRS-mandated reimbursement rate for business travel, which currently stands at 54 cents per mile.
The hope is now that the draft currently making its way through the hands of the lawmakers will include exemptions and also clear definitions on how much compensation a nonprofit ride-sharing outfit—such as colleagues or even strangers sharing a car—is allowed to accept before being required to undergo full registration as a TNC. This, of course, does not address how a company like Wunder would be hoping to make money out of ride-sharing, as a commission model in the style of Grab or Uber would almost certainly not be classified as nonprofit, but maybe the time has come where the current commercial model is already outdated again, to be replaced by a different monetization strategy that places the end user in control. Decentralized approaches to ride-sharing such as Arcade City or LibreTaxi would certainly hint at such a future being a possibility, but only time will tell what kind of transportation marketplace we will end up with.