Transportation Law

TNVS AND TNC

DISCUSSION GUIDE:
• WHAT IS A PUBLIC UTILITY
• CHARATERISTICS OF A PUBLIC UTILITY
• WHAT ARE TNCs AND TNVs AND ITS CHARACTERISTICS?
• ARE THEY TREATED AS ENGAGED IN THE OPERATION OF PUBLIC UTILITY?
• REGULATORY AGENCIES
• RELEVANT ISSUANCES(LTFRB AND DOTR)
• ARE TNCS AND TNVS COMMON CARRIERS?
• WHAT ARE THE LIABILITIES OF TNCS AND TNVS?
• RELEVANT CASES
WHAT IS A PUBLIC UTILITY?
BUSINESS OR SERVICE
ENGAGED IN REGULARLY
SUPPLYING THE PUBLIC
WITH SOME COMMODITY
OR SERVICE OF PUBLIC
CONSEQUENCE.

GOODS OR SERVICES ESSENTIAL FOR HUMAN LIFE

IMPRESSED WITH PUBLIC

INTEREST
CHARACTERISTICS OF A PUBLIC
UTILITY
• SUPPLY ESSENTIAL GOODS AND SERVICES
• OFFERS ITS SERVICES TO INDEFINITE PUBLIC
• SUBJECT TO STRICT REGULATION
• TENDENCY TOWARD MONOPOLIES
• PERSONAL INFORMATION VIA DATA EXHAUST
What are TNC and TNVS?
Transport Network
Companies (TNC)
• Under section 1 of DOTR Department Order 2018-013:
• a person or entity providing pre-arranged transportation services
for compensation.
• uses an internet based technology application or digital platform
technology to connect passengers with drivers using their
personal vehicles
Transport Network
Vehicle Service (TNVS)
• Section 2 of the Department Order
provides:
• a TNC accredited private vehicle
owner, which is a common carrier,
using the internet-based
technology application or digital
platform technology.
• Transports passenger from one
point to another for compensation.
• Provides door-to-door services
and do not have specific routes
Regulation and Supervision
• Under Department Order 2018-013, The TNCs
and TNVS are subject to full regulation and
supervision by the LTFRB.
ARE TNCS AND TNVS ENGAGED IN THE
OPERATION OF PUBLIC UTILITY?
YES. DO 2018-013 provides that due to the established roles of TNCS and TNVS in providing
transport services to the public, they should be treated as engaged in the operation of a public
utility.
• It provides transportation services, a baseline requirements for members of a modern society.
• It held out its services to the general public.
• It is subject to strict regulation as it is imbued with public interest.
• It gathers rider’s location and activities as an outgrowth of its business.
• It links users to each other or to the communities of providers.
THE REGULATORY AGENCIES

• LAND TRANSPORTATION FRANCHISING AND REGULATORY

BOARD(LTFRB)- promulgate, administer, enforce and monitor compliance
of policies, laws and regulations to public land transportation services.
• DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS(DOTC) – responsible for the primary policy,
planning, programming, coordinating, implementing and administrative
entity on promotion, development and regulation of a dependable and
coordinated network of transportation systems, as well as in the fast, safe,
efficient and reliable transportation services.
 Created new classifications:
DO 2015-11
DO 2015-11
1. TNC – Transport Network Companies
2. TNVS – Transport Network Vehicles

• TNVS are required to secure Certificates of Public

Convenience by LTFRB
• TNVS is treated as a common carrier under the
new civil code
DO 2017-011 • TNC is treated as a transport provider (LTFRB vs
DO 2017-011
Valenzuela; MC 2015-015-A)
 • Both are considered as common carriers and
classified as public utilities.
• Both are required to secure Certificate of
Public Convenience by LTFRB.
• LTFRB is expressly authorized to determine
DO 2018-013
the fare for TNVS, after public hearing or in
DO 2018-013
consultation with TNCS and TNVS.
• Both shall ensure compliance with equity
restrictions and participation of foreign
management, and jurisdictional
requirements, publication and hearings when
applying for CPC.
Are TNC and TNVS
Common Carriers?
• Previously only TNVS were already considered
common carriers while TNCs were not expressly
considered public utilities but defined as "an
organization whether a corporation, partnership,
sole proprietor, that provides pre-arranged
transportation services for compensation using an
internet-based technology application or digital
platform technology to connect passengers with
drivers using their personal vehicles.
• But now, Under the Department Order 2018-012,
TNCS and TNVS are now both
expressly considered as common carriers and
classified as public utilities.   
 FACTS:
• On May 26, 2016, DBDOYC registered it business with the
SEC.

• Subsequently, in December 2016, launched “Angkas”, on

online and on-demand motorcycle-hailing mobile application
LTFRB vs Hon. Carlos (Angkas or Angkas app) that pairs drivers of motorcycles
Valenzuela  with potential passenger without, however, obtaining
G.R. No. 242860, March mandatory certificate of TNC accreditation from LTFRB.
11, 2019
• LTFRB issued a press release on January 27, 2017 informing
the riding public that DBDOYC, which is considered as a TNC,
cannot legally operate. 
 FACTS:
• DBDOYC filed a Petition for Declaratory Relief Application for
Temprorary Restraining Order/ Writ of Preliminary Injunction
against the petitioners before the RTC alleging among others
that:
LTFRB vs Hon. Carlos
Valenzuela  A. It is not a public transportation provider since Angkas app is
G.R. No. 242860, March a mere tool that connects the passenger and the
11, 2019 motorcycle driver.

B. Angkas and its driver are not engaged in the delivery of

public service.
 • ISSUE:
LTFRB vs Hon. Carlos • Whether Angkas is a transport network provider and
Valenzuela  whether TNC’s are considered as common carriers. 
G.R. No. 242860, March
11, 2019
 • HELD: YES. 
• DBDOYC’s operation is not enough to extricate its business from the
definition of common carriers, which, as mentioned, fall under the
scope of the term public service.
• As the DBDOYC itself describe, Angkas is a mobile application
LTFRB vs Hon. Carlos which  seeks to "pair an available and willing Angkas biker with a
Valenzuela  potential  passenger, who requested for a motorcycle ride, relying on
geo location technology." Accordingly, it appears that it is practically
G.R. No. 242860, March  functioning as a booking agent, or at the very least, acts as a third
11, 2019 party liaison for its accredited bikers. Irrespective of the
application's  limited market scope, i.e., Angkas users, it remains that,
on the one  hand, these bikers offer transportation services to wiling
public  consumers, and on the other hand, these services may be
readily  accessed by anyone who chooses to download the Angkas
app. 
 • In De Guzman v. Court of Appeals, the Court discussed the relation 
between Article 1732 of the Civil Code and Section 13 (b) of the
Public  Service Act, explaining that Article 1732 of the Civil Code
does not  distinguish between a carrier who offers its services to the
general  public and one who offers services or solicits business only
from a  narrow segment of the general population. 
• As the Court observes, the genius behind the Angkas app is that
LTFRB vs Hon. Carlos it removes the inconvenience to physically hail in public transportation
Valenzuela  by creating a virtual system wherein practically the  same activity may
G.R. No. 242860, March now be done at the tip of one's fingers. As it is the  trend of modern
technology, previously cumbersome mundane  activities, such as
11, 2019 paying bills, ordering food, or reserving  accommodations, can now be
accomplished through a variety of online  platforms. By DBDOYC's
own description, it seems to be that Angkas  app is one of such
platforms. As such, the fact that its drivers are not  physically hailed on
the street does not automatically render Angkas accredited drivers as
private carriers. 
 • While DBDOYC further claims that another distinguishing
factor of its  business is that "[its] drivers may refuse at any
time any legitimate  demand for service by simply not going
online or not logging in to the  online platform," still when they
do so log-in, they make their services  publicly available. In
other words, when they put themselves online, their services
LTFRB vs Hon. Carlos are bound for indiscriminate public consumption. Again,  as
Valenzuela  also-mentioned above, Article 1732 defining a common carrier
G.R. No. 242860, March  "carefully avoids making any distinction between a person or
11, 2019  enterprise offering transportation service on a regular or
scheduled  basis and one offering such service on an
occasional, episodic or  unscheduled basis." This doctrinal
statement seems to be the apt  response to DBDOYC's
assertion. 
What are their liabilities?
• Under the Department Order No. 2018-013, TNC and TNVS as public
transport providers shall observe diligence required of common
carriers in accordance to the New Civil Code.
OBLIGATIONS AND LIABILITIES
TNCS

• Exercise due diligence and reasonable care in accrediting drivers (LTFRB

Memorandum Circular 2015-016).
• The accredited TNC shall be liable if it knowlingly accredits to its digital technology
application platform or network, or fails to annually ascertain the eligibility of each
driver.
• They shall be held liable for acts or omissions of TNVS while online, except:
• for actions of drivers who are independent contractors who provide transportation services directly
to passengers
• if the same is beyond TNCs’ control.
• The accountability of TNC commences from the acceptance of its TNVS while
online(MC 2015-016-A)
OBLIGATIONS AND LIABILITIES
TNVS

• LIABILITIES OF A COMMON CARIER

• Presumption of negligence
• Damages in case of breach of contract of transportation
• Liable for acts of strangers
• The accountability of TNVS from the time the TNVS is online and
offers its services to the riding public(MC 2015-018-A)