A DAVAO City councilor is proposing for the review of existing laws and crafting of new policies to improve the working conditions of food delivery riders in Davao City.
On April 6, 2021, Davao City Councilor Pamela Librado passed a resolution to review the Revenue Code of Davao City after her office received reports that food delivery riders are being required to secure several permits before they can offer food delivery services.
"During a hearing on the Proposed Workers' Protection and Development Office by the SP Committee on Labor and Employment Opportunities conducted last March 22, 2021, we were made aware of another situation where food delivery riders are now required to secure business or occupational permits. Such would entail additional annual expenses on their part and a significant reduction to their income," Librado said.
In March, John Paul Manapat, Grab Philippines-Mindanao Operations manager, sent a formal letter to the City Council regarding the requirement of additional permits for food delivery riders.
"Mr. Manapat requested on behalf of their food delivery partners that the delivery riders be allowed to continue operating as food delivery riders or independent contractors without the need of applying for a business or occupational permit. The Grab representative added that if they were required to apply for an occupational permit for their riders, this arrangement should not mean recognizing the riders as Grab employees," Librado said.
According to Article 1, Section 94 of the Revenue Code of Davao City, any person or entity without a Mayor’s Permit and paying the necessary fees to the City Treasurer, cannot conduct or engage in any business, trade, or occupation in the city.
She added that the permits are "beyond the capacity of individual riders to manage."
"By requiring the permits, riders would need to pay the City Environment and Natural Resources Office even if they don't have waste disposal; they would need to pay BFP fees and certificates even if they don't manage physical stores. Furthermore, they would need to shell out additional money for the BIR registration," Librado said.
She said these additional requirements would burden food delivery riders with the same responsibilities imposed on well-resourced companies.
"They will have to file before the Bureau of Internal Revenue (BIR) for payment of certain fees and taxes and penalties, if needed, on top of the fact that they are not tax-exempt like minimum wage earners," Librado said.
Based on an initial barangay survey conducted by her office, they have found that riders shoulder the cost of securing their own permits.
"We found out that riders pay for their own gas or fuel and will end up shouldering any additional fees should they be required to have a business or occupational permit," Librado said.
Meanwhile, the councilor said there is a need to craft policies to improve the working conditions of food delivery riders.
She said riders have complained before the Department of Labor and Employment (Dole) "that mobile app operators treat them as mere business partners, freelancers, and/or independent contractors, instead of employees."
Librado added that the riders neither have fixed wages nor social protection benefits.
Based on an initial barangay survey conducted by her office, they have found that riders shoulder most of their operational expenses.
"The motorcycle they use is likewise bought at their own expense, which includes taking out other loans. Furthermore, the riders do not get overtime pay despite working 10 to 12 hours a day, and most have no insurance should they get into accidents," Librado said.
She said while the company will arrange for the insurance coverage, it will still be the rider who will shoulder the cost.
Librado said riders also raised the issue on the "batch system."
"They also decried a so-called batch system that determines their earning brackets and assigns specific riders for delivery run," she said.
Librado said fake bookings or delivery scams also put a risk on the financial security of the delivery riders because "these end up listed as order cancelations and could result in a rider's suspension."
"Where there is very little financial and social security for local service riders, the City requires them to obtain a business or occupational permit pursuant to the Revenue Code. While the Revenue Code aptly contemplates regulation on the part of companies, it is inequitable to require the same rigid process for business permits to individual riders," Librado said.
Librado said there is a need to study the current policies of the City and come up with workable arrangements to address issues concerning the employment arrangement and nature of work of local service riders as independent contractors.