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Taxicabs of the Philippines are one of the modes of transportation in the

country. They are regulated by the Department of Transportation and

Communications (DOTC) and by the Land Transportation Office (LTO). The

taxicabs there vary from models and uses. Most taxicabs have yellow colored

license plates, taxi signs, LTFRB Registration number, and taximeter, which is

mandatory in every cab.1

Taxi operation from its humble beginning up to its booming industry today

partakes in the flourishing economy of the country. Taxi industry became one of

the sought-after businesses of Filipinos. Taxis played an important role in the

lives of the people as a faster mode of transportation compared to a public utility

jeepney (PUJ), which follows a specific route and served number of commuters.

However, together with this importance came with taking of advantage of the taxi

drivers/operators to their patrons.

Wikimedia, Inc. last modified on 8 November 2010. Retrieve on 13 March 2011
However, although these problems have been identified, still these hurdles

continued to exist in the country and here in Davao City. The researchers intend

to focus on the issues within the Davao City.

Hence, this paper intends to identify the boon and bane of the taxi system

in the city and propose possible remedies to minimize if not abolish these

disadvantageous; to answer what Davao City¶s local authorities can do to

improve the taxi system to provide better services not only for the locals but also

to enhance the tourism in the city.



Taxicabs in the Philippines started in the 1960s and further boom after the

ousting of the late Ferdinand Marcos in the mid-1980s. During the 1990s, taxis

did not have a color coding system but in 2001, LTFRB mandated that all

taxicabs should be white. Some taxicab companies, however, still use their own

colors to distinguish their units while keeping the roof and pillars white. Airport

taxis, on the other hand, are yellow. Furthermore, a taxicab has a maximum

operational lifespan of 10 years before being pulled out of service.

Under its regulation, each taxicab must have its license plate number

printed on both quarter panels. Also, the rear of the car must print the telephone

numbers of the taxicab company and the LTFRB to report any reckless driving.


During the 60¶s, Davao City used to have black Mercedes Benz as taxis

but was withdrawn after the car company reportedly complained their top of the

line cars were being debased and cheapened.

Taxis, however, disappeared in Davao City as well as other cities in

Mindanao in the µ70s and were replaced by PU ›  .

During the µ80s Mindanao¶s rapid growth gave rise to increase demand in

public transport system and further re-introduced taxis in the city in the early µ90s

despite the reluctance of some people to part with the ›  .2

Today, taxicab industry is booming, having more than 4,000 taxicabs

operating in the city.

Espejo, Edwin. ˜   
. Modified on 07 January 2011. Retrieved on 13 March 2011.
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The first transport system like the modern taxi system that we know today

started with hired carts pulled by horses (carriages) in the cities of Paris and

London in the early 17th century. In the 19th century, Hansom cabs were mostly

used because of their higher level of speed and safety. The invention of the

taximeter by German Wilhelm Bruhn in 1891 paved the way for the modern taxi.

This taximeter is the familiar mechanical and now often electronic device that

calculates the fare in most taxicabs. The first modern meter-equipped taxicab

was the Daimler Victoria, built by Gottlieb Daimler in 1897; the first motorized taxi

company began operating in Stuttgart the same year.3


 The use of taxi or taxicabs has rapidly increased in metropolitan areas

where people are always in a rush to arrive at their destinations at the least

possible time. Thus, various systems have been employed by different countries

to effectively regulate their taxi operations.

Dictionary 3.0 Encyclopedia. Retrieved on March 13, 2011.

Most cities in the United States implement a system wherein the number of

taxicabs operating is being restricted. This system is called the medallion system

which dates from a Depression-era city law designed to address an

overabundance of taxis that depressed driver earnings and congested city


In a study conducted by Schaller and Gilbert, the issue of whether or not

the medallion system is the culprit behind the taxi service problems in New York

City was raised. Critics of the system argued on the affirmative based on the

reasoning that ³good service depends on good drivers; good drivers demand

higher wages; and the medallion system keeps driver wages low. They asserted

that it is necessary to scrap the medallion system in order to resolve taxi service

problems. However, the proponents of the study concluded that the problems are

not merely result of the medallion system. The analysis shows that drivers'

wages are not kept low just by the medallion system, nor does the system keep

all fare increases from reaching drivers.5 In a different study conducted by

Schaller and Gilbert, it was concluded that regardless of what system is

implemented, substantial improvements in New York taxi service depend on

Schaller, Bruce and Gilbert, Gorman. VILLAIN OR BOGEYMAN? NEW YORK'S TAXI MEDALLION SYSTEM. Retrieved
on March 1, 2011.
Schaller, Bruce and Gilbert, Gorman. VILLAIN OR BOGEYMAN? NEW YORK'S TAXI MEDALLION SYSTEM. Retrieved
on March 1, 2011.
fundamentally changing the relationship between drivers and owners and

changing the perverse incentives ingrained in the industry.6


There is a mature system of taxicabs throughout Europe. In Great Britain,

the taxi fare is calculated based on a taxi meter that charges by both time and

distance. Its local authority has the responsibility of regulating taxi and private

hire vehicles together with their drivers. Licensed vehicles normally have an

identification (ID) plate at the rear and sometimes also at the front holding

information such as the licence number, expiry date and the number of

passengers it can carry7.

In a research entitled, ³An international taxi cab evaluation: Comparing

Madrid with London, New York, and Paris´, an exploratory study was undertaken

in order to evaluate the quality of Madrid's taxi cab industry. The paper analyses

the current situation of Madrid¶s taxi system by using the Taxi Cab Management

Model (TCMM) which identifies the key processes for managing and operating a

taxi cab service in any international city. It was concluded that the Madrid taxi

cab industry is ahead of cities like London, New York and Paris in terms of IT

integration within the industry. One of the best features of the taxi cab industry of
Schaller, Bruce and Gilbert, Gorman. FIXING NEW YORK CITY TAXI SERVICE. Retrieved on March 1. 2011.
Taxicabs by Country. Retrieved on March 13, 2011.
Madrid was found to be the test for candidate drivers. It is well designed in terms

of its user interface (candidates do not need to be computer literate), it has a

large bank of questions (up to 6000) that are used randomly to generate

examinations, and it offers a highly efficient way to assess candidates.8


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 The proponents used internet research and cases in conducting the

research study.

Various internet sources were used for most parts of the paper in
presenting data, this sources dwell on matters relating to the taxi system in
Davao City, the effect of this taxi system in the Philippine tourism, and rules and
regulations adopted by the city in furtherance of the development of its taxi

Skok, Walter and Martinez, Juan Antonio. An international taxi cab evaluation: Comparing Madrid with London,
New York, and Paris. Uploaded on July 21, 2010. Retrieved on March 13, 2011.
Relevant cases were also included to muster viability of this taxi system
and other measures to further gauge its effectiveness that will undeniably cater
the needs of the residents of the city especially the passengers. Noteworthy is
the adaptation of Davao City of a more sophisticated taxi system that will boost
the taxi industry in the coming years.



 Undeniably, Taxis are either boon or bane here in the Philippines. By

saying so one must delve into various factors contributing to its being boon or
bane such as the rising prices of gas which as a consequence resulted to the
increase of the flag down all over the country enacted by the LTFRB, the re-
calibration of the taxi meter, adaptation of the Davao city to a more sophisticated
taxi system that paves way into boosting taxi industry for tourism, and finally the
measures or ordinance constituted or enforced by the City to enhance the taxi



Taxi Operation in Davao City is an important factor in the enhancement of

the tourism in the city. Tourists who came in the city prefer to ride in a taxi which

would drive them to places they tend to visit in one-ride than PUJ which the

routes are not familiar to them.


Davao, like most part of the Philippines, had an issue about taxi drivers

charging exorbitantly high fixed rate once passengers got in their cab. This

modus operandi is especially rampant in airports, where passengers are most

often tourist, who are left with less or no choice at all but to avail the taxi¶s


Taxi drivers also tend to discriminatorily select their passengers. Some

drivers reject passengers who live in more distant place unless the passengers

agree to pay additional fee aside from the metered fee.

Another modus of taxi drivers is that instead of transporting their

passengers with the shortest distance possible and least expensive, they go for

longer route to out-wit and extort money from the latter.

These are just some of the illicit acts done by taxi drivers which

subsequently discourage tourist from visiting the city, which would pull down the

economy particularly the tourism.