MANILA – The Land Transportation Franchising and Regulatory Board (LTFRB) on Friday issued a temporary reduction in surge pricing for ride-hailing services during peak hours and other high-demand periods during the holiday season.
In a statement, LTFRB Chair Vigor Mendoza II said the adjustment will only take effect beginning Dec. 17, 2025, until January 4, 2025, or during the peak of the holiday season.
“We heard the complaints, and we also feel the sentiments raised by those in the TNVS sector, which is why we immediately acted on this in response to the instruction of President (Ferdinand R.) Marcos (Jr.) and Secretary (Giovanni) Lopez to come up with the guidelines on the computation of TNVS fares,” Mendoza said.
The LTFRB will also continue to study surge pricing for transport network vehicle services (TNVS), including the rules, regulations and jurisprudence relating to the TNVS fare matrix.
He said surge pricing was originally intended as a mechanism to balance supply and demand by encouraging more TNVS drivers to go online when and where demand is high and improve service availability.
However, he said a lack of specific parameters on how surge pricing fares should be computed is resulting in numerous complaints from passengers.
Under LTFRB Memorandum Circular (MC) 2019-036, which sets the TNVS fare matrix, surge pricing must not be more than twice the base fare, but it failed to lay out guidelines on how to compute surge pricing.
On the other hand, the new MC 2025-056 was intended to come up with a “win-win” solution to address both the concerns of commuters and TNVS drivers.
Under the new memorandum, surge pricing must not exceed the B+C TNVS fare matrix—with B referring to the per-kilometer rate while C refers to the per-minute charge of the TNVS.
To date, hatchback and sub-compact TNVS units have a flag down rate of PHP35, sedans at PHP45, AUVs at PHP55, and premium units at a PHP145.
On the other hand, the per-kilometer rate for hatchbacks and sub-compacts is PHP13, sedans at PHP15, AUVs at PHP18, and premium units at PHP36 per kilometer charge.
All units have a PHP2 per-minute travel charge except for premium units at PHP4.
In the new MC, a car/sedan TNVS that traveled 5 kilometers in 10 minutes will charge its passenger PHP75 for the per-kilometer rate and PHP20 for the 10-minute travel time—for a total of PHP95, plus the flag down rate of PHP45.
Therefore, the surge pricing must not exceed PHP95 for sedans.
To maximize the earnings of TNVS drivers, the LTFRB memo also specifically stated that transport network companies (TNCs) must not charge a share for the surge price.
“The TNCs shall not collect any share, commission, or impose a service fee derived from the surge price component of the TNVS fare during the implementation of this Memorandum Circular,” the MC read.
It ordered both TNVS operators and TNCs to reconfigure their fare-computation algorithms on or before Dec. 17, 2025, to reflect the new surge pricing. (PNA)