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Download Download Philippine Management Review 2018, Vol. 25, 1-26. Comparative Market and Industry Analysis of Traditional Taxi Services and Transportation Network Vehicle Philippine Management Review Services in Metro Manila Publication Ethics and Malpractice Statement Luis Diego Dans Lee* University of the Philippines, Cesar E.A. Virata School of Business, Diliman, Quezon City 1101, Philippines The Philippine Management Review is committed to the highest publication standards and ensuring Amidst its highly contested entrance into the Philippine market, Transportation Network quality of submissions. Acceptance decisions are based on articles’ significance, originality, clarity, Vehicle Services (TNVS) have significantly affected the life of the typical Metro Manila commuter. This study aimed to contextualize the consumer decision process behind the relevance to the journal's scope, and contribution to the body of management knowledge. selection of private land transportation options among Metro Manila users, in order to direct policy discourse for policymakers and to define the competitive dimensions in the industry for key players. In particular, the study aimed to understand the reasons behind usage and The Editorial Board exerts every effort to ensure accuracy and clarity of research reporting. It expects preference of traditional taxi services (TTS), Grab, and Uber – the leading private transport compliance with highest standards of ethical behavior on the part of all parties involved: authors, brands in the city. The results were intended as input into a Usage, Attitude, and Image (UAI) market research study to accurately depict consumer response to the brands. Using market editors, peer reviewers, and the publisher. Authors are expected to submit original works. Current reports and in-depth interviews, the study described the key service attributes that sanctions against copyright infringement and plagiarism shall apply. Reviewers are selected consumers consider and evaluate, compared against the core service features of these transport options. A comprehensive industry analysis was done to compare and contrast the according to their expertise in their particular fields, and are expected to adhere to professional brands objectively. The fundamental service attributes were broadly defined as ride standards of objectivity, confidentiality and research clarity during the review process. completion, safety, value for money, convenience, and ride experience, each composed of sub- attributes or features that all lead to customer satisfaction. The study concludes that multi- attribute variable comparison through conjoint analysis will be more suitable than a UAI The Editorial Board reserves the right to pass judgment on the acceptability for publication of any study to depict consumer acceptability and preference for TNVS brands. given submitted article. In the eventuality that the Board discovers, after due process, any form of Keywords: Transportation Network Vehicle Services, Transportation Network Companies, misconduct or malpractice in these matters, it further reserves the right to publish and disseminate, Grab, Uber, Taxis, Metro Manila, Qualitative Consumer Research, Consumer Decision Making when needed, any corrective notice, and proceed to formal retraction or removal of the article, if Process, Services deemed necessary. On 11 July 2017, the Philippine Land Transportation and Franchising Regulatory Board (LTFRB) issued a consolidated show-cause order addressed to My Taxi PH, Inc. (Grab) and Uber Systems, Inc. (Uber). Following a hearing where Grab and Uber representatives openly admitted to operating at least 80% of their fleets without provisional authority permits (PAs) or certificates of public conveyance (CPCs), the LTFRB imposed a fine of PHP 5 million to each transportation network company (TNC). This decision glossed over the fact that LTFRB had publicly stopped the processing and release of PAs and CPCs since 22 July 2016, citing the need to review existing policies.1 This effectively limited the fleet size of both Grab and Uber. If LTFRB followed their own regulations for the management of TNCs published as LTFRB Memorandum Circular No. 2015-016, titled the Terms and Conditions of a Certificate of Transportation Network Accreditation and released in May 2015, both companies faced the cancellation of accreditation and would have had to shutter their national operations.2 In lieu of this sanction, LTFRB instead decided to impose a fine. On top of this fine, both Grab and Uber were tasked to submit to a list of administrative requirements in the screening and deployment of drivers in Metro Manila, including the immediate discontinuation of connecting riders to trips made with unaccredited drivers. Grab and Uber were granted 15 days to comply with the terms and conditions governing TNCs, or erring drivers would face up to three months’ detention, a fine of PHP 120 thousand, and criminal charges as colorum vehicle drivers (i.e., public vehicles operating without a franchise). Meanwhile, LTFRB has made no definite confirmation that new and pending applications for Grab and Uber drivers would be granted permits. Consumer response to this decision was swift. On the same day that LTFRB released the show- cause order, James Deakin, motoring journalist for the Philippine Star, posted a poll on his Facebook page to invite his followers to show support for Grab and Uber, as well as to challenge LTFRB to * Correspondence: Tel: +63 2 928 4571; Fax: +63 2 929 7991. Email: [email protected] 1 Talabong, 2017 2 ibid 2 Comparative Market and Industry Analysis of Traditional Taxi Services and Transportation Network Vehicle Services in Luis Diego Dans Lee 3 Metro Manila overturn their decision. The poll consisted of one question: “Which of the two do you feel is the safer, booking fee on top of the standard rate). These overlaps and opportunities for co-operation have more convenient option?” with the options presented as “Taxi” and “Grab/Uber.” As a media shown the relative benefit of TNVS to both TNCs and taxi operators, but have been left out of personality, he stated in an accompanying post that he “(wanted) to give the decision-makers a regulatory consideration. snapshot of the amount of people that actually rely on and trust these services as their safest option when commuting… (and) that the whole success of ride sharing was born from the failures of taxis.” 1 Significance of the Study Within three days, the poll generated almost 70,000 responses3 overwhelmingly supporting Grab and Uber, with 99.7% preference for the two brands. A similar petition on Change.org posted on 16 While several global studies have accounted for ridesharing services’ effects on the transport July 2017 by Bobby Coronel, founder of a group of Grab drivers called TopSpeed, called for LTFRB to economy and traditional transport frameworks of urban cities, studies have yet been unable to lift the suspension on PA and CPC applications. The petition has garnered over 56,000 online establish key parameters in terms of consumer acceptability and industry performance, as measures signatures since Grab re-posted the petition on its Philippine Facebook page on 17 July 2017. to evaluate the public impact of TNCs in the country. These figures reflected public sentiment over TNCs and their perceived benefits to the Paronda, Napalang, and Regidor (2016) attempted to determine key performance indicators transportation consumer. Since Grab and Uber have pioneered ridesharing through applications in (KPIs) of TNCs in the Philippines as travel speed (average KPH), passenger expense (PHP spent per the Philippines in 2013, demand has grown considerably. In December 2016, Uber Philippines kilometer), reliability (number of available vehicles in an area), and quality of service (passenger general manager Lawrence Cua estimated that Uber had 600,000 active users in the country, rating). While these are relevant KPIs, the study focused on strictly quantitative measures and 4 serviced by a fleet of 20,000 drivers. In August of the same year, Grab Philippines country director excluded consumer perception and brand imagery of ridesharing services in contrast to traditional Brian Cu reported marginally better performance than its competitor “with more than 10,000 drivers taxi services, as well as an estimation of market dynamics and behavior upon the entry of Uber and located in seven key cities (servicing) more than a million users who have the mobile app on their Grab in the market. These key factors demonstrate the integral value of TNCs and TNVS to the 5 phones.” The ascent of Grab and Uber has allowed for the entry of newer players in the ridesharing modern transportation economy. industry, such as Easy Taxi, Tipid, Tripda, U-Hop, Wunder Carpool, Angkas, and CitiMuber, which Nistal and Regidor (2016) attempted a more grounded approach to understanding the new provided similar transportation services for commuting, package delivery, and other mobility services. Their method (1) anchored Uber’s distinction as a TNC, in competition with taxi companies services. As of 2015, the combined reported revenues of Grab and Uber in the Philippines amounted and (2) quantitatively highlighted that Uber was superior to taxis on several key attributes. The key to PHP 636.8 million (Lopez, 2016), a mere 0.9% of the total PHP 69.5 billion that Filipinos in the weakness in the study was that it prescribed service attributes to respondents for evaluation, versus 6 National Capital Region spent on transport
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