ILOILO City — The Land Transportation Office (LTO) has issued a warning to car rental operators across Western Visayas to secure a mandatory franchise from the Land Transportation Franchising and Regulatory Board (LTFRB), as authorities move to curb the growing number of unauthorized or “colorum” vehicle rental operations.
The reminder comes amid increasing reports that private vehicle owners are being recruited into informal car rental groups without securing the legally required franchise, a practice LTO Region 6 said violates transport regulations and poses risks to passengers.
Atty. Gaudioso Geduspan II, regional director of LTO-6, said the agency has received complaints about the recruitments.
“This scheme has come to my attention – rogue operators urging private vehicle owners to become part of car rental organizations, bypassing the crucial step of securing the required franchises,” he said.
According to the LTO-6 chief, such unauthorized operations undermine legitimate businesses and expose commuters to potential safety risks.
“Car rental operators and private vehicle owners offering their units for hire must apply for and obtain the appropriate franchise from the LTFRB or its regional offices to legitimize their operations,” LTO-6 added in a public statement.
The directive is anchored on LTFRB Memorandum Circular No. 2024-038, which took effect on Oct. 10, 2024. The policy repealed previous circulars — Memorandum Circulars No. 2011-008 and No. 2019-003 — removing exemptions previously granted to certain car rental arrangements.
Under the new regulation, all vehicle leasing services, including long-term leasing arrangements, are now required to secure a valid LTFRB franchise before operating.
Authorities said the measure aims to standardize regulations for the car rental industry, ensure fair competition among operators, and strengthen protection for passengers.
LTO-6 urged car rental operators and vehicle owners intending to enter the business to apply for the appropriate franchise, ensure compliance with LTFRB safety and operational standards, and properly inform clients about the legitimacy of their services.
Geduspan also warned that operators who continue to participate in unauthorized arrangements could face penalties and enforcement actions.
“Operators who participate in these questionable arrangements risk not only their businesses but also face significant penalties and enforcement actions from the authorities,” he cautioned.
The regional office said its intensified campaign against colorum transport activities is part of broader efforts to ensure a safe, regulated, and reliable transport system for residents and visitors across Western Visayas./PN
