City council proposes to relax permit policies for delivery riders

City council proposes to relax permit policies for delivery riders
(NF Photo by Arjoy Ceniza)

DAVAO CITY – The 19th City Council on Tuesday’s (April 6) regular session passed a resolution urging the executive department to review the revenue code of the city and procure reconcilable policies for food delivery riders in view of the requirements for the mayor’s business permit.

The resolution penned by First District Councilor Pamela Morata seeks to review existing policies to match the needs of local delivery riders, to remove any unnecessary burden imposed upon them, and promote a fair system that will give riders sufficient opportunities to earn.

It stated in Article 1, Section 94 of the Revenue Code of Davao City, that it is unlawful for any person or entity to conduct or engage in any business, trade, or occupation in the City of Davao without securing a Mayor’s Permit and paying the necessary fees to the City Treasurer.

Food delivery riders are required to secure a Business or Occupational Permit for the continuance of their delivery operations and for the same to be considered as a legal undertaking.

Morata said that by requiring such permits, riders would need to pay the City Environment and Natural Resources Office even if they do not have waste disposal; they would also need to pay the bureau of Fire protection (BFP) fees and certificates even if they do not manage physical stores.

“Service delivery riders are considered essential workers and were exempted from quarantine and lockdown restrictions. For over a year now, Davao residents have continued to rely on this kind of service to conveniently order food without leaving their homes,” she said.

She said the additional requirement for permits is beyond the capacity of individual riders to manage. It is akin to putting individual riders to the same level as companies who have resources since they will be required by the Bureau of Internal Revenue (BIR) payment for certain fees, taxes, and penalties, if needed, on top of the fact that they are not tax-exempt like minimum wage earners.

“They would need to shell out additional money for the BIR registration. It results in an unfair situation where riders are burdened with the same responsibilities imposed on established and well-resourced companies since 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,” Morata stressed.

“These delivery riders do not have fixed wages and social protection benefits. In fact, the riders already complained before the Department of Labor and Employment that mobile app operators treat them as mere business partners, freelancers, and/or independent contractors, instead of employees,” according to her.

Morata, however, said that while the imposition of the requirement for the Business or Occupational Permit will provide a security benefit for both the City and the Riders, there are underlying payments and requirements therefore which are deemed unnecessary and impractical.

“The underlying requirements for and the Business or Occupational Permit itself will procure a significant monetary value from the small income of the Food Riders, which in effect will be inequitable considering the facts above mentioned,” she added.

Grab Philippines-Mindanao Operations Manager John Paul Manapat wrote a letter to the City Council last month expressing their sentiments about the policy of the city and requested that the delivery riders be allowed to continue operating as food delivery riders/ independent contractors without the need of applying for a business or occupational permit.

Manapat, in his letter insisted 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.

In previous months, some riders complained before the Department of Labor and Employment that mobile application operators treat them as mere business partners, freelancers, and/or independent contractors, instead of employees.

They also decried a so-called batch system that determines their earning brackets and assigns specific riders for delivery runs. The riders also take the brunt for fake bookings or delivery scams since these end up listed as order cancelations and could result in a rider’s suspension.

“Due to this distinct development concerning the employment arrangement and nature of work of local service riders as independent contractors, there is a need to study the current policies of the City and come up with workable arrangements to address these issues,”Morata further said.