What is the so-called “boundary system”?

Under this system the driver is engaged to drive the owner/operator’s unit and pays the latter a fee commonly called boundary for the use of the unit. Whatever he earned in excess of that amount is his income. (Paguio Transport Corp. v. NLRC, G.R. No. 119500, Aug. 28, 1998)

What kind of relationship exists between the owner of the vehicle and the driver under a "boundary system" arrangement?

The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. (Martinez v. NLRC, G.R. No. 117495, May 29, 1997).

The features which characterize, the "boundary system" – namely, the fact that the driver does not receive a fixed wage but gets only the excess of the amount of fares collected by him over the amount he pays to the jeep- owner, and that the gasoline consumed by the jeep is for the account of the driver – are not sufficient to withdraw, the relationship between them from that of the employer and employee. (National Labor Union v. Dinglasan, G.R. No. L-14183, Nov. 4, 1993)