Councilor: Collecting fees from riders ‘impractical,’ ‘unjust’

Photo by Mark Perandos

A DAVAO City councilor, who is pushing to suspend the collection of fees for food delivery riders in the city, said requiring them to acquire a business permit individually is “impractical and inequitable.”

Councilor Pamela Librado-Morata passed on Tuesday, April 13, a resolution titled “A Resolution Urging FoodPanda, All Other Similar Entities, and the City Business Bureau to Suspend the Collection of Fees for Food Delivery Riders in Davao City.”

The resolution was passed by the City Council. It also covers Grab and other food delivery riders.

In her resolution, Librado-Morata emphasized the need to suspend the collection for business permit payments by the Business Bureau, foodpanda, and other companies engaged in food delivery services, while the 19th City Council reviews amendments on the Revenue Code of Davao City.

The councilor said it was reported by the delivery riders that food delivery companies continue to collect and set deadlines for the collection of business permit payments.

She added that foodpanda delivery riders have also received text messages of their account being closed due to non-payment of the said permit.

Librado-Morata said this situation prompted her to pass the resolution to suspend said payments.

These fees include electronic fee, garbage fee, mechanical fee, plumbing fee, sanitary permit, signboard fee, sanitary inspection, solid waste, tax clearance, and zoning fee, which amounts to more than P4,000 to be paid quarterly.

She said this is in light of the current situation raised by food delivery riders that even though the Revenue Code is set to be revised, companies continue to require payments for business permits from delivery riders.

The councilor reiterated that to require delivery riders to acquire a business permit individually is impractical and inequitable.

"Aside from business permit registration and the above-mentioned regulatory fees, riders need to register before the Bureau of Internal Revenue (BIR) with the burden of paying annual registration and monthly filing for payment of tax returns as well as the need to hire bookkeepers so as not to be imposed with surcharges and penalties for improper filing and failure to pay monthly taxes," Librado-Morata said in the resolution.

In addition to said payments, food delivery apps such Grab and foodpanda, as well as other food delivery companies that operate locally, employ these delivery riders and classify them as “independent contractors” or mere “business partners.”

She said such classification exempts said companies from the legal obligations to provide standard wages, benefits, and fair working terms and conditions.

"In short, there is no employer-employee relationship in such cases, to the detriment of this new sector of workers. To require them to pay P4,000 for business permits in a situation where they do not have a stable income or tenure security is unjust," Librado-Morata said.

In initial consultations that her staff recently conducted with delivery riders, the councilor said the amount required for these permits is too much, especially in the context that many are still paying loans for their motorcycles and are shouldering fuel expenses.

Among the options forwarded by the councilor is to adopt the practices of other local government units, which is to only collect from the riders annual occupational permits, without imposing an additional burden of having them shoulder BIR registration and monthly fees, issuance of official receipts, bookkeeping, and accounting procedures.

According to Librado-Morata, delivery riders are not asking for a free pass or to be exempted from regulation, "but merely a temperate and just treatment suitable to their income, capacity, and work arrangement."

"There is a need to properly situate them as a new and emerging workforce whose plight deserves the local government’s attention and proper action," she said.


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