Law Summary
Devolution of LTFRB's Franchising Authority to Local Governments
- Pursuant to the Local Government Code, the Land Transportation Franchising and Regulatory Board’s (LTFRB) franchising authority over tricycles-for-hire has been devolved to municipal and city governments.
- Relevant provisions are Section 447(3)(vi) for municipalities and Section 458(3)(vi) for cities.
- The devolution aims to facilitate the smooth transfer of relevant powers and responsibilities.
Key Definitions
- Tricycle-for-hire: A motor vehicle consisting of a motorcycle with a single-wheel sidecar or two-wheel cab, operating to transport the public for a fee.
- Motorized Tricycle Operator's Permit (MTOP): A franchise/licensing document authorizing an individual or entity to operate tricycles-for-hire within a specified zone.
- Zone: A contiguous geographical area (e.g., subdivision or barangay) where tricycles operate without fixed routes.
Powers Granted to Local Government Units (SB/SP)
- Issue, amend, renew, suspend, or cancel MTOPs and set terms.
- Determine and adjust fares after public hearings.
- Prescribe and regulate service zones in coordination with barangays.
- Fix and periodically review fees and charges for regulating tricycles-for-hire, but adjustments limited to once every three years.
- Establish qualifications and conditions for service operation.
Rules of Entry and Qualifications
- Only Filipino citizens or entities with at least 60% Filipino ownership may operate tricycles-for-hire.
- Applicants must possess tricycle units registered with the LTO.
- MTOP holders must maintain common carrier insurance covering passenger and third-party liabilities.
Fare Structure and Regulation
- Fares should provide operators reasonable profit while remaining affordable to the public.
- Fare systems may be flat rate or distance-based (minimum plus rate per kilometer).
- Pending local fare determination, initial official fare set at Php 2.00 minimum plus Php 0.50 per km for distances beyond 4 km.
- Fare tables must be prominently displayed at terminals and in vehicles.
Operating Conditions and Restrictions
- Tricycles may not operate on national highways used by heavy vehicles (over 4 tons) and where speed exceeds 40 KPH, except by exception from SB/SP.
- Service zones must lie within municipal/city boundaries; multi-jurisdiction zones require separate MTOPs from each LGU.
- Common color scheme for tricycles in the same zone may be imposed; each vehicle receives an identification number.
- Operators must report service suspension or termination in writing; transfer to other zones requires SB/SP approval.
- MTOP validity is three years, renewable for the same term.
- Transfer of ownership or zone changes are considered amendments needing SB/SP approval.
- Drivers must have valid LTO licenses for tricycle operation.
- Passengers/goods carried must not exceed vehicle design capacity.
- Tricycles operate like taxis: no fixed routes, on-demand service within zones.
Franchise and Other Fees Imposed by Local Governments
- Annual Franchise Fee, payable on or before MTOP anniversary.
- Filing Fee for new MTOP applications based on number of units.
- Fare Adjustment Fee collected with annual franchise fee upon fare increase approval.
- Filing Fee for MTOP amendments.
Additional Provisions
- LTFRB shall provide tricycle operator records to respective LGUs.
- Special permits or provisional authorities issued by LTFRB remain valid until expiration.
- Operators may opt to convert to the new MTOP system prior to expiration.
- LTO retains registration and enforcement powers over motorized vehicles.
Effectivity and Transition
- Starting July 1, 1992, only municipal or city Sanggunians may issue MTOPs.
- LTFRB’s franchising authority over tricycles-for-hire ended June 30, 1992.
- This devolution transfers regulatory control but does not affect LTO's registration duties.