The Supreme Court ruled that the Regional Trial Court (RTC) committed grave abuse of discretion in issuing a writ of preliminary injunction in favor of DBDOYC, Inc. (Angkas). The injunction had prevented the Land Transportation Franchising and Regulatory Board (LTFRB) and the Department of Transportation (DOTr) from regulating Angkas’ operations. This decision underscores the government’s authority to regulate transportation services, especially those affecting public safety and welfare, even in the context of innovative, app-based platforms.

Angkas Under Scrutiny: Can Motorcycle Ride-Hailing Bypass Public Transportation Regulations?

This case revolves around the legality of Angkas, a motorcycle ride-hailing service, and the extent to which it can operate without complying with existing transportation regulations. The LTFRB and DOTr sought to regulate Angkas, arguing that it operates as a public transportation provider and must adhere to the same rules and regulations as other common carriers. DBDOYC, Inc., the company behind Angkas, countered that it is merely a technology platform connecting passengers with motorcycle drivers, and thus not subject to public transportation regulations. This legal battle highlights the tension between fostering innovation in transportation and ensuring public safety through established regulatory frameworks.

The central issue before the Supreme Court was whether the RTC acted with grave abuse of discretion when it issued a writ of preliminary injunction, effectively preventing the LTFRB and DOTr from regulating Angkas. The Court emphasized that a writ of preliminary injunction requires the existence of a clear legal right. The RTC based its decision on DBDOYC’s constitutional right to liberty, asserting that this includes the right to conduct business without undue interference. However, the Supreme Court disagreed, stating that the State has a legitimate interest in regulating businesses that affect public welfare through its police power.

The petitioners, LTFRB and DOTr, contended that DBDOYC is a transportation provider and its drivers are common carriers engaged in public service, therefore subject to regulation. They pointed to Department Orders (DOs) 2015-11 and 2017-11, which classify transportation services into Transportation Network Companies (TNCs) and Transportation Network Vehicle Services (TNVS), as well as Commonwealth Act No. 146, the Public Service Act, as the basis for their regulatory authority. Section 13(b) of the Public Service Act defines “public service” broadly, including:

(b) The term “public service” includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification…

Furthermore, Section 15 of the same law mandates that no public service shall operate in the Philippines without a Certificate of Public Convenience (CPC). These provisions underscore the legislative intent to regulate entities offering transportation services to the public.

DBDOYC argued that it is not a common carrier because its services are not offered to the general public but only to users of the Angkas app. They claimed that their technology merely connects a willing biker and a willing passenger under a fare scheme set by DBDOYC, creating a private contractual arrangement. However, the Supreme Court found this argument unpersuasive. The Court referenced Article 1732 of the Civil Code, which defines common carriers as:

Article 1732. 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.

The Court cited De Guzman v. Court of Appeals, explaining that Article 1732 makes no distinction between carriers offering services to the general public and those offering services to a narrow segment of the population. This interpretation aligns the concept of “common carrier” with “public service” under the Public Service Act. The Court reasoned that the Angkas app, by connecting bikers with passengers, effectively functions as a booking agent or third-party liaison, making transportation services readily accessible to anyone who downloads the app.

Even if Angkas-accredited bikers were not considered common carriers, the Court noted that Section 7 of Republic Act No. 4136 (Land Transportation and Traffic Code) prohibits the use of privately registered motorcycles for hire. Specifically, the law states:

Section 7. Registration Classification. – Every motor vehicle shall be registered under one of the following described classifications:

(a) private passenger automobiles; (b) private trucks; and (c) private motorcycles, scooters, or motor wheel attachments. Motor vehicles registered under these classifications shall not be used for hire under any circumstances and shall not be used to solicit, accept, or be used to transport passengers or freight for pay.

The Court therefore concluded that DBDOYC did not have a clear and unmistakable right, and the RTC gravely abused its discretion in issuing the preliminary injunction. The ruling underscores the principle that businesses offering transportation services, whether through traditional or innovative platforms, are subject to regulation to protect public safety and welfare. The Court emphasized that the administrative issuances by the LTFRB and DOTr are presumed valid unless set aside, further supporting the need for Angkas to comply with existing regulations.

The Court made it clear that its decision was limited to the propriety of the preliminary injunction and did not resolve the underlying dispute regarding the legality of Angkas’ operations. The main case for declaratory relief remains pending before the RTC. This means that the final determination of the rights and obligations of the parties, including the validity of the regulations themselves, must await further proceedings. The Court acknowledged the contemporary relevance of regulating ride-booking and ride-sharing applications but stressed the importance of adhering to procedural and jurisdictional boundaries.

This case highlights the delicate balance between encouraging innovation and upholding public safety. While the Supreme Court acknowledged the potential benefits of app-based transportation services, it also reaffirmed the State’s authority to regulate such services to ensure they operate within a safe and lawful framework. The decision serves as a reminder that businesses, regardless of their technological advancements, must comply with existing laws and regulations designed to protect the public.

FAQs

What was the key issue in this case?	The central issue was whether the RTC committed grave abuse of discretion in issuing a writ of preliminary injunction preventing the LTFRB and DOTr from regulating Angkas’ operations. The Supreme Court ultimately found that the RTC did abuse its discretion.
What is a writ of preliminary injunction?	A writ of preliminary injunction is a court order that temporarily prevents a party from performing certain actions while a case is ongoing. It is meant to preserve the status quo until the court can make a final decision.
What is a common carrier?	A common carrier is a person or company that transports passengers or goods for compensation, offering their services to the public. Common carriers are subject to government regulation to ensure public safety and fair practices.
What is a Certificate of Public Convenience (CPC)?	A CPC is a permit issued by the government that authorizes a public service to operate. It is required for common carriers and other businesses that provide essential services to the public.
What is the Public Service Act?	The Public Service Act is a law that regulates public services in the Philippines, including transportation, communication, and utilities. It defines public services and sets the rules for their operation.
Why did the Supreme Court rule against Angkas?	The Court ruled that Angkas did not have a clear legal right to operate without complying with transportation regulations. The Court found that Angkas functions as a common carrier and is subject to regulation under existing laws.
Does this ruling mean Angkas is illegal?	This ruling does not definitively declare Angkas illegal, but it does remove the preliminary injunction that was preventing the LTFRB and DOTr from regulating it. The underlying case regarding the legality of Angkas’ operations is still pending.
What is the significance of this case?	This case clarifies the authority of the government to regulate app-based transportation services, even those that claim to be merely technology platforms. It also highlights the importance of balancing innovation with public safety and compliance with existing laws.

The Supreme Court’s decision underscores the importance of regulatory compliance for businesses operating in the transportation sector, regardless of their innovative approaches. As technology continues to reshape various industries, this case serves as a reminder that businesses must adapt to existing legal frameworks and prioritize public safety and welfare. The resolution of the main case for declaratory relief will further clarify the legal landscape for ride-hailing services in the Philippines.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LTFRB vs. Valenzuela, G.R. No. 242860, March 11, 2019