Tricycle and jeepney operators
A franchise from one office, a driver on boundary, and daily cash. Here is what the operating side looks like on paper.
Owning a unit and putting it on the road looks simple: buy the vehicle, secure the franchise, find a driver, collect the boundary.
It is a business, with an owner, an asset, a worker, and daily revenue. The paperwork rarely matches that reality, and it is worth understanding where the gaps are.
Two different offices, two different things
The franchise to operate a route comes from the transport regulator. It is permission to run a public utility vehicle on a particular route. It says nothing about tax.
Registration as a business is separate. An operator earning from a vehicle is earning business income, and the ordinary obligations follow: being registered, keeping records, and filing on schedule.
Operators frequently hold the first and not the second, on the reasonable-sounding assumption that a franchise is the government permission required. It is one permission, from one agency, for one purpose.
What counts as your income
For an owner on a boundary arrangement, the income is what the driver hands over, not what passengers paid. The driver keeps the difference between fares collected and the boundary, and that difference is the driver's, not yours.
That makes your side relatively simple to record: a daily amount per unit, most days of the year. The costs are equally knowable: fuel where you shoulder it, maintenance, parts, insurance, franchise-related costs, and the vehicle itself, which is a long-lived asset and is treated as one rather than as a single expense in the year you bought it.
Operators with several units often have no records at all, because the money is cash and the routine is daily. The absence of records does not reduce the income; it just means nobody, including the operator, knows what the business earns.
Your driver
The relationship between operator and driver is the part most likely to cause trouble.
A boundary arrangement is not automatically outside employment. Whether a driver is an employee depends on the substance of the relationship, and the answer affects the contribution systems, entitlements, and what happens after an accident or a dispute.
This is worth settling deliberately rather than assuming that the customary arrangement in your area is the legally correct one. The customary arrangement has been the subject of a great deal of dispute precisely because it is ambiguous.
Practical footing
Write down the daily take. One notebook, one line per unit per day. It takes a minute and it is the entire basis for knowing whether the unit is worth running.
Keep the receipts for maintenance and parts. They are real costs, and they only count if they exist on paper.
Treat the vehicle as an asset, not a one-off expense. Its cost is recognised over the years it serves you, and that treatment is standard rather than optional.
Settle the driver question. Know what your arrangement actually is, and make the paperwork match.
Watch the growth point. One unit run by the owner is one thing. Several units with hired drivers is a business with employees, and the obligations grow with it.
Operating a unit and unsure what applies beyond the franchise? Ask AskOnward for a plain answer from the official BIR rules, so the operating side is as sorted as the route.
This article is for general information and is not affiliated with the government. For official forms and the latest rules, see the Bureau of Internal Revenue at bir.gov.ph.