A Global Problem

E-hailing companies, also known as ride-hailing or transport network companies (TNCs), operate digital platforms—typically mobile apps—that connect passengers with available drivers for on-demand transportation services. Rather than hailing a taxi from the street or calling a dispatch center, users of e-hailing apps like Grab can book a ride with a few taps on their smartphones.

The fight of e-hailing drivers for legal recognition as employees is a growing legal issue not just in the Philippines but across different countries. Interpretation of the status of e-hailing drivers unfortunately differs by jurisdiction.

In the United Kingdom, its Supreme Court favored drivers in the 2021 case of Uber BV and Others v Aslam and Others and declared that Uber drivers were considered employees essentially because of the control Uber has over its drivers, specifically because:

1. Uber which dictates how much drivers are paid for the work they do
2. The contract terms on which drivers perform their services are imposed by Uber and drivers have no say in them
3. Once a driver has logged onto the Uber app, the driver’s choice about whether to accept requests for rides is constrained by Uber
4. Uber also exercises significant control over the way in which drivers deliver their services. 

Unfortunately, not many courts agree with this reasoning. The Supreme Court of California, the High Court of Malaysia, and the Employment Court of New Zealand (Auckland) all held that e-hailing drivers are independent contractors.

In other countries, such as Vietnam and India, the fight of drivers continues as their employment status is yet to be determined by their government. Meanwhile, Singapore and China have established executive guidelines to regulate app-based employment and determine the rights of online platform workers, which seems to result in creating a separate category for platform workers, between employees and independent contractors, with specific rights and dispute mechanisms. 

Slow Development for the Philippines

In 2023, the Supreme Court held that Lazada riders are employees. The Supreme Court used the four-fold test to determine if Lazada had an employer-employee relationship with the petitioners. Under the four-fold test, four key elements are considered:

1. Hiring by the employer,
2. Payment of wages,
3. Power to dismiss, and
4. Employer’s control over how the work is done (otherwise known as the control test).

In this case, the Court found that all elements of the four-fold test were satisfied, declaring Lazada riders as employees:

1. Hiring: Petitioners signed contracts directly with Lazada.
2. Wages: They received P1,200 per day from Lazada, as stated in their contracts.
3. Dismissal power: Lazada could terminate them for breaching any major contract provision.
4. Control: Lazada supervised their work through requirements like route sheets, trip tickets, incident reports, and imposed penalties for lost items.

However, policies with regard to car drivers of TNCs remain vague. Land Transportation Franchising and Regulatory Board (LTFRB) issued Memorandum Circular No. 2015-015 covers “TNCs providing internet- based digital technology application or digital platform technology to facilitate transportation of passengers by the drivers with the use of their personal vehicles”. The memorandum states that:

The TNC shall exercise due diligence and reasonable care in accrediting drivers. The TNC shall be liable for failure to exercise due diligence and reasonable care, except if such non-compliance is due to acts or omissions outside of the TNC’s control. However, such liability shall not extend to actions of drivers, who are independent contractors who provide the transportation services directly to passengers.

Unfortunately, unlike the case of motorcycle riders employed by delivery apps such as Lazada, the Supreme Court is yet to determine the employment status of TNC drivers. This particular gap in policy is being taken advantage of by e-hailing companies to escape liability. For example, in 2022, in a case before the National Privacy Commission (NPC 19-142), Grab Philippines argued that it should not be held liable for the actions committed by its drivers because there is no employee-employer relationship. 

By insisting they are “independent contractors,” the company avoids obligations typical of an employer which means no benefits, no bargaining, no security of tenure. This framing also means e-hailing unilaterally sets the fare rates, changes commission structures, and imposes sanctions even without consultation.

Outdated Policies

Under Article 234 of the Labor Code, a union must comprise at least 20% of employees in the bargaining unit. However, for TNC drivers, the figure remains vague. What is the proper bargaining unit? Are we talking about drivers, operators, or vehicles? 

Based on an interview with a TNC driver/operator, the company refuses to provide a list or even disclose how many “partners” (drivers, operators, or vehicle units) are currently active. In one city, union organizers had to rely on a news article quoting the TNC as having “900 units” to even begin calculating the 20% requirement. 

This legal ambiguity does not just frustrate the process, it paralyzes it.

Need for Unionization

The internal structure of TNCs allegedly offer no genuine grievance mechanism for drivers. Sanctions, often based on vague allegations of bad behavior or alleged contract violations, are issued unilaterally, with no process for defense or appeal. Suspensions or terminations are swift and final, often decided by algorithm or anonymous complaints.

“Partner” drivers are also subjected to deductions in income without consent. As exposed by multiple investigations, including those by PCIJ, Rappler, and ABS-CBN News, drivers shoulder the losses when passengers use promo codes like Grab Saver or discounts for seniors, persons with disabilities, or students. In some cases, drivers report earning as little as 60% of what the fare originally was—after expenses, maintenance, and platform cuts. In response to the complaints, LTFRB issued Memorandum 2025-10 which mandated that fare discounts should equally be shared by TNCs and their drivers.

How can this be considered a “partnership” when drivers have no control over their own income and no real contract negotiation happens? 

WIll history favor TNC drivers?

Decades before the 2023 Lazada case, the Supreme Court affirmed the employment status of drivers as employees. Across Philippine history, the evolution of the transportation sector carried with it the issue of employment relationships. The Supreme Court, however, consistently favored drivers and decided that there is an employer-employee relationship between them and the companies who hired them, summarized as follows:

Year	Mode of Transportation	Case	Employer-Employee
1959	Jeepneys	Dinglasan v. National Labor Union	Jeepney owner and driver
1966	Auto-calesas	Citizens’ League of Freeworkers vs. Abbas	Auto-calesa owner/operator and driver
2000	Taxi cabs	Jardin v. NLRC	Taxi owners/operators and taxi drivers.
2023	Lazada riders (transport of packages)	Ditiangkin v. Lazada	E-platform company and riders

Unfortunately, the advancement of technology created new problems which put the status of e-hailing drivers in limbo despite the prevailing decision in favor of Lazada riders. Unlike traditional transportation where the company owns the vehicle, TNCs enter into Transportation Network Vehicle Service (TNVS) contracts with car owners, making the car owners the operators. In some cases, TNVS operators do not drive their own units but hire their own drivers instead. This makes the TNC-TNVS relationship complicated and not directly compatible with previous decisions. Nevertheless, the economic imbalance still exists. Neither TNVS operators nor drivers have any genuine control over their income, nor do they have power to negotiate their contracts as opposed to what “partners” in regular contracts have. 

The 2021 Uber case in the UK and the 2023 Lazada case in the Philippines should serve as references. Both reaffirm that under the four-fold test, drivers and operators remain subject to the control and economic dominance of e-hailing platforms. In the absence of clear regulatory intervention and government action to define the employment status of e-hailing drivers, they will remain trapped in a cycle of exploitative fare structures, arbitrary penalties, and an imbalance of economic power. 

The government should cope with technological changes. Labor policies need to be updated. Unfortunately, the road to unionization for e-hailing drivers remains obstructed by outdated structural barriers. It is high time that we recognize this class of workers as legitimate employees. (DAA)