Policy, purpose, and transfer intent
- The guidelines are issued to enable the smooth transfer of power responsibilities of the Land Transportation Franchising and Regulatory Board (LTFRB) over tricycles-for-hire to the municipal and city governments.
- The guidelines operationalize LGU franchising control while preserving the LTO’s registration role over motor vehicles under Republic Act No. 4136.
Legal basis and governing statutory hooks
- The guidelines are issued pursuant to Republic Act No. 7160 (Local Government Code).
- For municipalities, the relevant provisions cited are Section 447, par. 3 (vi), Article 3, Chapter 3, Title 2, Book III.
- For cities, the relevant provisions cited are Section 458, par. 3 (vi), Article 3, Chapter 3, Title 3, Book III.
- The registration authority for motor vehicles is retained under Republic Act No. 4136 (“Land Transportation and Traffic Code”), which is treated as not amended or superseded by Republic Act No. 7160.
Key definitions and regulated concepts
- A “Tricycle-for-hire” is a motor vehicle composed of a motorcycle fitted with a single-wheel side car or a motorcycle with a two-wheel cab operated to render transport services to the general public for a fee.
- An “MTOP (Motorized Tricycle Operator’s Permit)” is the document granting franchise or license to operate issued to a person, natural or juridical, allowing operation over the zones specified in the permit.
- A “Zone” is a contiguous land area or block (such as a subdivision or a barangay) where a tricycle-for-hire may operate without a fixed origin and destination.
Who must comply; operator qualification rules
- The Sangguniang Bayan / Sangguniang Panlungsod (SB/SP) performs the franchising functions previously exercised by the LTFRB over tricycles-for-hire.
- Only Filipino citizens and partnerships or corporations with 60% Filipino equity qualify to be operators of tricycles-for-hire.
- No MTOP is granted unless the applicant possesses units with valid registration papers from the LTO.
LGU franchising and fare-rate powers
- The SB/SP issues, amends, revises, renews, suspends, or cancels MTOPs, and prescribes the appropriate terms and conditions.
- The SB/SP determines, fixes, prescribes, or periodically adjusts fares or rates for the service provided in a zone after public hearing.
- The SB/SP prescribes and regulates zones of service in coordination with the barangay.
- The SB/SP fixes, imposes, collects, and periodically reviews and adjusts reasonable fees and other related charges in regulating tricycles-for-hire but not oftener than once every three (3) years.
- The SB/SP establishes and prescribes the conditions and qualifications of service.
Rules of entry and operational requirements
- An MTOP grantee must carry a common carrier’s insurance sufficient to answer for liability to passengers and third parties in case of accidents.
- For safety reasons, no tricycle may operate on national highways utilized by 4-wheel vehicles greater than 4 tons where normal speed exceeds 40 KPH.
- The SB/SP may provide exceptions to the national-highway restriction if there is no other alternative route.
- Zones must be within the boundaries of the municipality/city.
- Existing zones within more than one municipality/city must be maintained, but operators serving those zones must secure MTOPs from each municipality/city having jurisdiction over the covered areas.
- A common color may be imposed for tricycles-for-hire operating in the same zone.
- Each unit must be assigned and bear an identification number, in addition to its LTO license plate number.
- An operator who stops service completely or suspends service for more than one month must report in writing such termination or suspension to the SB/SP that originally granted the MTOP.
- Transfer to another zone may be permitted upon application.
- The MTOP is valid for three (3) years and is renewable for the same period.
- Transfer to another zone, change of ownership of the unit, or transfer of MTOP is treated as an amendment to an MTOP requiring appropriate approval of the SB/SP.
- Operators must employ only drivers duly licensed by LTO for tricycles-for-hire.
- No tricycle-for-hire may carry more passengers and/or goods than it is designed for.
- A tricycle-for-hire may operate like a taxi service—service is rendered upon demand and without a fixed route within a zone.
Fare setting, initial fare default, and posting
- Fares must be established at a level that provides the operator a reasonable return or profit and remains affordable to the general public.
- The fare structure may be either flat (single fare regardless of distance) or a minimum amount plus a basic rate per kilometer.
- Until the SB/SP prescribes the fare structure for the zone, the initial official fare is a minimum fee of P2.00 plus P0.50 per km in excess of 4.0 km distance.
- The table of fares must be posted prominently at the tricycle terminal and in a conspicuous part of the vehicle.
Fees collectible by SB/SP
- The SB/SP may impose and collect the following fees and charges:
- Annual Franchise Fee: collected once a year on or before the anniversary date of the MTOP, unless the SB/SP decides another schedule.
- Filing Fee: collected upon application for an MTOP based on the number of units.
- Fare Adjustment Fee for Fare Increase: accrues upon approval of a fare increase and is collected together with the annual franchise fee.
- Filing Fee for Amendment of MTOP: collected upon application.
Records flow, LTFRB special permits, and LTO enforcement
- The LTFRB must furnish records of tricycles-for-hire and their operators to their respective local governments.
- Special permits or provisional authorities issued by the LTFRB remain valid until their expiry date.
- Operators may apply earlier with the SB/SP for a new MTOP or an amendment of an existing MTOP.
- Nothing in the guidelines limits LTO powers in registering motor vehicles and enforcing transport rules.
Effectivity, transition of authority, and duration
- The guidelines provide that effective 01 July 1992, only the SB/SP shall issue MTOP for tricycles-for-hire.
- The guidelines provide that the powers, functions, and authorities of the LTFRB over these vehicles cease on 30 June 1992.