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LTFRB suspends inDrive over alleged ‘fare-haggling’ model

Will the TNC be able to operate again?

Have you tried using inDrive? PHOTO BY LEANDRO MANGUBAT

The Land Transportation Franchising and Regulatory Board has ordered the suspension of operations for inDrive following alleged fare violations.

In a statement to the media, the LTFRB announced that operations of inDrive, run by RL Soft Corporation, have been temporarily suspended by the agency starting January 23, until the company complies with MC 2019-036 (Fare Rates For Transportation Network Vehicle Services).

The suspension comes as the result of allegations that the firm broke TNVS rules by allowing the haggling of fares, rather than just charging standard rates as laid out in the rules.

This is the fare matrix of the LTFRB. SCREENSHOT FROM LTFRB

The LTFRB called the practice a “clear breach of the terms and conditions outlined in its accreditation as a Transportation Network Company (TNC),” and issued a cease-and-desist as a result. It also gave the company 15 days to show proof of compliance with transport rules.

The inDrive website states that passengers can offer a fare for a ride, which is quite different from other ride-sharing services or taxis. It calls them “fair fares,” and claims its business model leads to a friendlier atmosphere and peace of mind.

Not only was inDrive suspended for 30 days, but company representatives also attended an in-person hearing on January 23 where LTFRB officials grilled them over their actions.

LTFRB chairman Teofilo Guadiz III is on record as saying that if inDrive continues to operate while suspended, the regulator will move to revoke its accreditation. He also reminded TNVS companies to adhere to the rules to ensure the integrity of the system.

The app doesn't work for passengers. SCREENSHOTS FROM INDRIVE

Anyway, inDrive only received accreditation late last year, and this suspension and questioning of its business model are now seemingly putting the firm at risk.

Either company management  can convince the LTFRB that its haggling model is somehow legal and within the rules, or the company faces having to change its fare model or even cease to operate.

This would then put a stop to its challenge of transport behemoth Grab, which pretty much has had a monopoly on the market since Uber exited the country a few years ago.

Frank Schuengel

Frank is a German e-commerce executive who loves his wife, a Filipina, so much he decided to base himself in Manila. He has interesting thoughts on Philippine motoring. He writes the aptly named ‘Frankly’ column.