Exercising its regulatory powers for the first time since accrediting the apps-based ride-sharing firms, the government has ordered Uber and Grab to impose a cap on their rates amid complaints from commuters that they have imposed exorbitant fare prices.
The Land Transportation Franchising and Regulatory Board (LTFRB) stated that the “surge multiplier” for transport network companies (TNCs) – the formal name it gave to the ride-sharing firms – should only be twice the rates for time covered and distance traveled, excluding the base fare.
As a result, Uber has agreed to lower its multiplier max to 2.9 from 5.0 while Grab will go down to 1.6 from 2.5.
Grab said it has placed a cap on its rates from December 24, 2016 until January 30, 2017. For its part, Uber has implemented a limit on their price surge until January 15, 2017.
The TNCs were also given a period of 10 days to file their respective position papers on issues such as liability and reasonable determination of rates.
LTFRB has earlier warned Uber and Grab that it will suspend or cancel their accreditation if they impose unreasonable price surges.
This is the first time that the LTFRB has regulated the business model of the ride-sharing apps since the Philippines became the first country in the world to officially accredit them as TNCs.
The government agency said it had received complaints from passengers that the surge in fares has ranged from P2,000 to P28,000.
However, motoring journalist James Deakins said in his blog that the P28,000 fare was an error made by a user who picked Mindanao as a destination rather than Mindanao Ave. in Quezon City. – PNA