DEMAND AND SUPPLY – Boo Chanco (The Philippine Star) – January 8, 2020 – 12:00am
LTFRB has been issuing confusing statements over the past weeks. It announced that it is placing a 10,000 cap on riders under Angkas supposedly to give similar motorcycle-hailing services a chance. Then it said services like Angkas can no longer operate after March 23. A multiagency technical working group (TWG) that supposedly studied the viability of bikes-for-hire sees no reason to extend the pilot test a third time.
Why place a cap on Angkas now to let other groups into the market if they will abolish the service totally in less than three months?
The faulty decision making of the LTFRB isn’t really surprising. It is probably the most neanderthal of government agencies, unable to adjust to the march of technology and new ways of doing things. It is just like the LTO that took a long time to figure out how to license the use of electric cars.
Angkas is a creative way by which our people are coping with the problems of commuting in Metro Manila. It gets people to where they are going faster than a car, a train or a bus. Probably, if Metro Manila had a decent mass transport system, Angkas will not be as needed as it is now. It will still be very relevant come March 23.
Inability to adjust to new technology and a lack of understanding of economic principles are making LTFRB the biggest stumbling block to ways of coping with the traffic problem, something that is also caused by government inability to provide mass transport. Worse, as in the case of Grab and probably also in Angkas, the LTFRB folks seem to have favorites rather than let market competition determine winners.
There was this earlier decision of the LTFRB to reduce the number of Angkas units to give way to another company. This is an instance of government interfering in what should be totally market play. Let all groups who want to provide a service compete for consumers through better service and rates. It also opens suspicion of corruption for the agency.
I doubt that their TWG included someone from the Philippine Competition Commission because the anti-monopoly body raised misgivings about how LTFRB is handling Angkas. LTFRB claims it wants to prevent a monopoly by Angkas. But as an official of the PCC pointed out, “its bigness is not like Grab which acquired its competitor and thereafter became dominant and a monopoly. Angkas grew out its own efforts.”
It is difficult to make economic sense of a unilateral 39,000 cap on riders and forcing a three way split. It is obvious LTFRB is playing favorites. As the PCC official puts it, “in a sense, you are taking away what Angkas has worked hard on obtaining which is a driver base.”
It was the same story earlier with Grab. Indeed, it is the PCC that is protecting the riding public rather than LTFRB. The PCC recently ordered Grab to pay back overcharging of fares to their consumers to the tune of over P14 million.
That Grab appears to be a favorite of the LTFRB could be seen in the way it protected it from getting credible competition from the successful Indonesian ride hailing service, Go Jek. They tried to use the citizenship requirement as the excuse, but refused to reconsider even after Go Jek addressed that issue.
Using technology to provide transport services is now a flourishing industry in many countries of the world. Except in the inner cities where taxis may still reign, people now depend on services like Uber and Lyft to bring them to their destinations.
The Filipino innovation is the use of motorcycles, given that it is more able to go through Metro Manila’s monstrous traffic jams. Of course we need government to supervise such a service. There has to be enough safeguards to address potential accidents and compensation to victims of accidents. Competence of motorcycle drivers should also be certified by government.
But beyond those points, it is best to let the market determine the winners. LTFRB should just set the rates based on an agreed criteria. Then, let market forces determine market share.
Perhaps it is best that Congress acts quickly to pass legislation that will provide the legal basis for providing these tech-based services. It is a pity that we are always playing catch up with technology. Congress is slow to recognize emerging technologies and the bureaucracy is always at a loss on how to address them.
Since livelihoods of thousands of people are at stake here, government must urgently address the need to provide a proper regulatory environment for these tech based transport services. Since LTFRB are mostly staffed by lawyers, only a clear cut law may be good enough for them.
This is an area of concern for Rep. Joey Salceda, the one congressman who seems to be truly concerned with seeking intelligent solutions to people’s problems. Let us rush legislation that should mitigate the harm the LTFRB is continuing to cause.
Perhaps in time, motorcycles for hire will no longer be needed because we have a proper mass transport system. But for now, anyone who has worried about getting to their workplaces on time are depending on this service. Besides, the service can easily go underground if it is banned or severely curtailed simply because it is needed. Unregulated, the service become dangerous to the riding public.
This is a daily life concern for many people. Hopefully, government helps rather than make their daily commutes more difficult.
Source: https://www.philstar.com/business/2020/01/08/1982858/angkas