A closer look at the liabilities of the ride-sharing apps in the Philippines

Amicus Curiae
Jo-Ann Geneive DJ. Perez

Posted on August 10, 2017

At present, ride-sharing applications, like Grab, have been the subject of close scrutiny by the public and the Congress, as shown during the recent congressional hearing in aid of legislation.

With the advent of technological advances and the widespread use of the Internet for almost anything possible in the online world, “ride-sharing applications” started to flourish in the country. These ride-sharing applications created a platform where the riding public can hail a private car by simply enabling their mobile Internet connection, inputting a place of pick-up and location and agreeing to the fare computed by the said apps.

On May 8, 2015, the Department of Transportation and Communications (DoTC), through then Secretary Jun Abaya, issued Department Order No. 2015-11, introducing and defining a new classification for public transport conveyance, namely, the Transportation Network Vehicle Service (TNVS), among others. In the said DO, a Transport Network Company (TNC), such as Grab, is defined as an organization whether a corporation, partnership, or sole proprietor, that provides pre-arranged transportation services for compensation using Internet-based technology application or digital platform technology to connect passengers with drivers using their personal vehicles. The DoTC, in the said DO, recognized that the TNCs are involved in a new industry which requires the guidance from the legislature for regulation.

This leads us to one of the most pressing legal issues surrounding the concept of TNCs and/or TNVS, that is, whether they may be classified as common carries as defined under the Civil Code or are merely private carriers, in terms of determining their liability in case of any death or injury to their passengers. Under Article 1732 of the New Civil Code, 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. By virtue of the nature of their business, the law requires common carries to exercise extraordinary diligence over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Some of the well-known common carriers in the Philippines are the Public Utility Jeepneys, Public Utility Buses, and taxi cabs.

The Land Transportation Franchising and Regulatory Board (LTFRB), issued Memorandum Circular No. 2015-15 stating that the TNC shall exercise due diligence and reasonable care in accrediting drivers. The TNC shall be liable for failure to exercise due diligence and reasonable care, except if such noncompliance is due to acts or omissions outside of the TNCs control. However, such liability shall not extend to actions of drivers, who are independent contractors and who provide the transportation services directly to passengers. To date, in the absence of any specific law defining TNCs and TNVS and delineating their respective liabilities, the said Memorandum Circular stating that only due diligence and reasonable care is required of TNCs, supplemented by DO No. 2015-11 defining TNCs, and the definition of common carriers under the Civil Code, TNCs, in theory, may not be regarded as common carriers as they are merely engaged in providing pre-arranged transportation services using Internet-based technology.

The foregoing notwithstanding, this author believes that the owners, operators and/or drivers of the TNVS fall under the definition of common carriers under the law and jurisprudence.

According to a number of cases, a common carrier (i) holds himself out in common, that is, to all persons who choose to employ him, ready to carry for hire; (ii) is bound to carry for all who offer such goods as it is accustomed to carry and tender reasonable compensation for carrying them; (iii) is subject to regulation as it is a public service; and (iv) is bound to exercise extraordinary diligence. Clearly, the TNVS, the owners, operators and/or drivers squarely fall under this definition. Thus, these persons must exercise extraordinary diligence in providing their services to the public. As such, under the Civil Code, in case of death of or injuries to passengers, these persons are presumed to have been at fault or to have acted negligently.

Considering the divergence in perspective, and given the significance of the TNCs and TNVs to the riding public’s safety, there is an urgent need for Congress to craft a law covering this innovation in the transportation industry.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

Jo-Ann Geneive DJ. Perez is an Associate of Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

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