LTFRB and DOTr vs. Valenzuela and DBDOYC, Inc.

A writ of preliminary injunction issues only upon a showing of a clear and unmistakable right that is violated; where the applicant operates as a common carrier and transportation network company without the required certificates of public convenience and accreditation, and where the law prohibits the use of private motorcycles for public transport, no such clear right exists to justify injunctive relief against regulatory authorities.

The Department of Transportation and Communications (predecessor of the Department of Transportation) issued Department Order No. 2015-11 on May 8, 2015, amending prior classifications of public utility vehicles to recognize technological innovations in transport service delivery. The order created classifications for Transportation Network Companies (TNCs) and Transportation Network Vehicle Services (TNVS). Subsequently, Department Order No. 2017-11, issued June 19, 2017, defined TNVS as public utility vehicles accredited with TNCs and explicitly prohibited motorcycles as public transport conveyances. The Land Transportation Franchising and Regulatory Board issued memorandum circulars governing TNC accreditation and the issuance of Certificates of Public Convenience for TNVS, establishing that TNCs are treated as transport providers and TNVS as common carriers. DBDOYC, Inc., registered as a corporation in May 2016, launched the "Angkas" mobile application in December 2016, pairing motorcycle drivers with passengers without obtaining TNC accreditation or Certificates of Public Convenience for its drivers. The LTFRB issued a press release in January 2017 warning that DBDOYC could not legally operate without proper accreditation.

• Regulatory Framework: The Department of Transportation and Communications issued Department Order No. 2015-11 on May 8, 2015, creating classifications for Transportation Network Companies (TNCs) and Transportation Network Vehicle Services (TNVS). Department Order No. 2017-11, issued June 19, 2017, defined TNVS as public utility vehicles accredited with TNCs and granted franchises by the LTFRB, and explicitly stated that motorcycles are not allowed as public transport conveyances. The LTFRB issued memorandum circulars declaring TNCs as transport providers accountable from the acceptance of a booking, and TNVS as common carriers accountable from the time they are online.
• DBDOYC Operations: DBDOYC registered with the Securities and Exchange Commission on May 26, 2016, and launched the "Angkas" application in December 2016, an on-demand motorcycle-hailing platform pairing drivers with passengers. It accredited drivers and allowed them to offer services without obtaining TNC accreditation or Certificates of Public Convenience.
• Regulatory Warning: The LTFRB issued a press release on January 27, 2017, informing the public that DBDOYC could not legally operate without accreditation.
• RTC Proceedings: DBDOYC filed a Petition for Declaratory Relief with prayer for TRO and preliminary injunction on July 4, 2018. The RTC issued a TRO on July 13, 2018, finding DBDOYC's business not subject to regulation. On August 20, 2018, the RTC issued a writ of preliminary injunction, ruling that DBDOYC had a clear right to conduct business based on constitutional liberty and that its arrangement with drivers was purely private contractual.

• Grave Abuse of Discretion: The RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the writ of preliminary injunction.
• Public Service Regulation: DBDOYC is a transportation provider and its accredited drivers are common carriers engaged in public service, subject to regulation under the Public Service Act (Commonwealth Act No. 146) and related issuances.
• Lack of Clear Legal Right: DBDOYC failed to establish a clear and unmistakable legal right to operate without the required certificates, as its business is imbued with public interest and subject to the State's police power.
• Prohibition on Motorcycles for Hire: Section 7 of Republic Act No. 4136 prohibits the use of private motorcycles for hire, rendering DBDOYC's operations illegal.

• Not a Public Service: DBDOYC is not a public transportation provider; the Angkas app is merely a tool connecting passengers with motorcycle drivers, and the arrangement is purely private contractual.
• Not a Common Carrier: Angkas drivers are not common carriers because they do not hold out their services to the indefinite public; they cannot be hailed on the street and only contract via the online platform.
• Invalidity of DO 2017-11: Should DBDOYC be deemed to perform a public service, DO 2017-11 should be declared invalid as it violates Section 7 of RA 4136, which does not prohibit motorcycles as public utility vehicles.
• Lack of Jurisdiction: Neither the LTFRB nor the DOTr has jurisdiction to regulate motorcycles for hire.
• Constitutional Liberty: DBDOYC has a constitutional right to liberty, including the right to earn a livelihood by any lawful calling, and prohibiting its operations would cause irreparable injury.

• Grave Abuse of Discretion: Whether the Regional Trial Court committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing a writ of preliminary injunction in favor of DBDOYC.

• Grave Abuse of Discretion: The RTC committed grave abuse of discretion in issuing the writ of preliminary injunction. Grave abuse of discretion arises when a court patently violates the Constitution, law, or jurisprudence through a capricious, whimsical, arbitrary, or despotic exercise of judgment.
• Clear Legal Right: A writ of preliminary injunction requires the existence of a clear and unmistakable right, not a doubtful or disputed one. The RTC erred in finding that DBDOYC had a clear right to conduct business based on constitutional liberty without regard to regulatory requirements.
• Common Carrier Status: DBDOYC functions as a booking agent for its accredited drivers who, by offering transportation services to the public through the Angkas platform, constitute common carriers under Article 1732 of the Civil Code. The definition of common carriers makes no distinction between those offering services to the general public and those offering to a narrow segment, nor between regular and occasional service.
• Public Service: As common carriers, the drivers fall under the definition of "public service" under Section 13(b) of Commonwealth Act No. 146, subject to the requirement of obtaining a Certificate of Public Convenience.
• Police Power: The State has a legitimate interest in regulating businesses affecting public welfare. The operation of motorcycle transport services is imbued with public interest and subject to police power regulation for public safety.
• Prohibition on Motorcycles for Hire: Section 7 of RA 4136 explicitly prohibits private motorcycles from being used for hire, supporting the conclusion that DBDOYC's operations lack legal basis.

• Grave Abuse of Discretion — Defined as a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and so patent and gross as to amount to an evasion of positive duty or virtual refusal to perform a duty enjoined by law.
• Requisites for Preliminary Injunction — The applicant must establish: (a) a clear and unmistakable right that needs protection; and (b) an urgent necessity for the writ to prevent threatened or continuous irremediable injury. Where the right is doubtful or disputed, preliminary injunction is improper.
• Common Carrier Definition — Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods for compensation, offering their services to the public. The definition deliberately refrains from distinguishing between: (a) principal and ancillary activities; (b) regular/scheduled and occasional/episodic services; and (c) services offered to the general public versus a narrow segment thereof.
• Public Service — Under Section 13(b) of Commonwealth Act No. 146, public service includes any person who owns, operates, manages, or controls for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier.
• Police Power — The inherent power of the State to regulate or restrain the use of liberty and property for public welfare, which may interfere with personal liberty and lawful businesses provided the interference is reasonable and not arbitrary.

• "By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law."
• "The first and foremost requisite in the issuance of a writ of preliminary injunction is the existence of a clear legal right... Thus, it will be issued only upon a showing of a clear and unmistakable right that is violated."
• "Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the 'general public,' i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population."
• "The fact that its drivers are not physically hailed on the street does not automatically render Angkas-accredited drivers as private carriers... when they put themselves online, their services are bound for indiscriminate public consumption."
• "Every court should remember that an injunction should not be granted lightly or precipitately because it is a limitation upon the freedom of the defendant's action. It should be granted only when the court is fully satisfied that the law permits it and the emergency demands it, for no power exists whose exercise is more delicate, which requires greater caution and deliberation, or is more dangerous in a doubtful case, than the issuance of an injunction."

• De Guzman v. Court of Appeals, 250 Phil. 613 (1988) — Controlling precedent interpreting Article 1732 of the Civil Code regarding the definition of common carriers and the absence of distinctions between types of service or clientele; followed to establish that Angkas drivers are common carriers.
• Department of Public Works and Highways v. City Advertising Ventures Corporation, 799 Phil. 47 (2016) — Cited for the definition of grave abuse of discretion and the requirements for issuance of preliminary injunction.
• Spouses Nisce v. Equitable PCI Bank, Inc., 545 Phil. 138 (2007) — Cited for the principle that a preliminary injunction requires a present and unmistakable right to be protected, and that a doubtful right is insufficient.
• Manila Memorial Park, Inc. v. Secretary of the Department of Social Welfare and Development, 722 Phil. 538 (2013) — Cited for the definition and scope of police power.
• Buyco v. Baraquia, 623 Phil. 596 (2009) — Cited for the provisional and ancillary nature of preliminary injunctions.

• Article 1732, Civil Code of the Philippines — Defines common carriers as persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.
• Section 7, Republic Act No. 4136 (Land Transportation and Traffic Code) — Prohibits private motorcycles from being used for hire or to transport passengers for pay.
• Section 13(b) and Section 15, Commonwealth Act No. 146 (Public Service Act) — Define "public service" to include common carriers and require a Certificate of Public Convenience for operation.
• Department Order No. 2015-11 and Department Order No. 2017-11 — DOTC/DOTr issuances creating TNC and TNVS classifications and prohibiting motorcycles as public transport conveyances.

Carpio, Senior Associate Justice (Chairperson), Caguioa, J. Reyes, Jr., and Lazaro-Javier, JJ.