Professional Documents
Culture Documents
The regulatory land transportation dates back to the early 1900s. The LTFRB
therefore, is a product of a series of transformations. The evolutionary
progression runs as thus:
Ruinous competition
Means that because of the competition, his income will be so reduced that it
will not give him an adequate return on his investment.
Fixing of Rates
The regulation of public utilities include the regulation of rates that they are
charging to the public. This aspect of regulation is in line with the policy of
the State to protect the public against arbitrary and excessive rates while
maintaining the efficiency and quality of services rendered.
A. Non-Delegation
The power to fix the rates of public utilities is a power that has been
delegated to the regulatory administrative agencies. As such, it cannot be
further delegated by the said administrative agencies.
It should be noted, however, that EO no. 213 issued by the President of the
Republic of the Philippines on Nov. 28, 1994, instituted the deregulation of
domestic shipping rates.
B. Discrimination
Discrimination in the charging of rates is not allowed under existing law and
rules.
Standard in Fixing Rates
The only standard which the legislature is required to prescribe for the
guidance of the administrative authority is that the rate be reasonable and
just.
a. Factors to Consider
The Supreme Court ruled three major factors in determining the just and
reasonable rates to be charged by a public utility:
(a) Rate of Return computed only for the purpose of fixing the
allowable rates to be charged by a public utility.
(b) rate base
(c) the rate itself or the computed revenue to be earned based on the rate
of return and rate base
Unlawful Arrangements
1. Boundary System
2. Kabit System
Boundary System
What is the so-called boundary system?
Under this system the driver is engaged to drive the owner/operators unit
and pays the latter a fee commonly called boundary for the use of the unit.
Whatever he earned in excess of that amount is his income. (Paguio
Transport Corp. v. NLRC, G.R. No. 119500, Aug. 28, 1998)
What kind of relationship exists between the owner of the vehicle and the
driver under a "boundary system" arrangement?
The relationship between jeepney owners/operators on one hand and
jeepney drivers on the other under the boundary system is that of employeremployee and not of lessor-lessee. (Martinez v. NLRC, G.R. No. 117495,
May 29, 1997).
The features which characterize, the "boundary system" namely, the fact
that the driver does not receive a fixed wage but gets only the excess of the
amount of fares collected by him over the amount he pays to the jeepowner, and that the gasoline consumed by the jeep is for the account of the
driver are not sufficient to withdraw, the relationship between them from
that of the employer and employee. (National Labor Union v. Dinglasan,
G.R. No. L-14183, Nov. 4, 1993)
Kabit System
What is the reason behind the proscription against the kabit system?
The thrust of the law in enjoining the kabit system is not so much as to
penalize the parties but to identify the person upon whom responsibility may
be fixed in case of an accident with the end view of protecting the riding
public. The policy therefore loses its force if the public at large is not
deceived, much less involved. (Lim v. CA, G.R. No. 125817, Jan. 16,
2002)
and, worse, may still be availed of by the grantee to escape civil liability
caused by a negligent use of a vehicle owned by another and operated under
his license. If a registered owner is allowed to escape liability by proving who
the supposed owner of the vehicle is, it would be easy for him to transfer the
subject vehicle to another who possesses no property with which to respond
financially for the damage done. (Lim v. CA, G.R. No. 125817, Jan. 16,
2002)
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