Grab defends fare structure as LTFRB orders lower surge prices

Dominant ridesharing firm Grab Philippines has justified its fare structure following a legislator’s call for it to refund at least P1.8 billion in alleged illegal charges.

Photo shows (from left) Grab PH country head Brian Cu, NPC chair Raymund Liboro, LTRFB board member Aileen Lizada, and NPC deputy commissioners Leandro Angelo “Dino” Aguirre and Ivy Patdu

Grab said its P2-per minute charge was in accordance with the order of the then Department of Transportation and Communications (DOTC) in 2015, which allowed transportation network companies (TNCs) to set its own fares with the oversight of the Land Transportation Franchising and Regulatory Board (LTFRB).

“Department Order ‎2015-011 allowed TNCs to set its own fares with the oversight of the LTFRB. In June 2017, Grab, upon review of its pricing structure, initiated per minute pricing of pesos. This was integrated to the existing per km (kilometer) charges and is not added to the upfront fares,” Grab Philippines public affairs head Leo Gonzales said in a statement Wednesday, April 11.

“The per minute charges were implemented to ensure that despite serious congestion issues on the road on a daily basis, hardworking TNVS (transportation network vehicle services) drivers would have a greater chance of making ends meet and supporting their needs,” he added.

“Per minute charges remain part and parcel to Grab’s fare structure today and we have continuously been transparent about this truth. In fact, during times when questions were raised about fares in certain trips, we would always back compute and provide the basic formula for the same including the per minute charges,” according to Gonzales.

Puwersa ng Bayaning Atleta (PBA) partylist representative Jericho Nograles accused Grab of illegally charging P2 per minute for their rides, on top of its flagdown rate of P40 and charging P10 to P14 per kilometer.

Nograles alleged that the illegal charges of Grab amounted to P1.8 billion during the past five months alone.

Meanwhile, the Land Transportation Franchising and Regulatory Board (LTFRB) has ordered Grab to reduce its surge pricing cap from 2 to 1.5 times the normal fare immediately as it processes the applications of new transportation network companies (TNCs).

The agency said it wants to ensure that the fares would be acceptable to TNVS operators who would transfer to Grab’s platform as a result of the acquisition of Uber’s operations in Southeast Asia.

“This is to ensure that the fares will be at a rate that is conducive and acceptable to the existing number of TNVS that are transferring to Grab,” LTFRB board member Aileen Lizada said during a hearing Wednesday.

This amends LTFRB’s order that sets the surge price rate of TNCs at twice the normal fare. For its part, Grab said it would comply with the LTFRB’s order to decrease its surge rates.

“We respect the Board’s decision to further lower the surge cap and we understand the justification for it. This is in fact a critical time and we believe as soon as the new players come in, the Board will perhaps study again the cap. But we will comply with the further downgrading of the cap from 2 to 1.5,” Gonzales said in an interview with reporters.

Grab said it would comply with the order of the Philippine Competition Commission (PCC) to maintain the independent business operations of Uber and Grab for the duration of its motu proprio review of the acquisition.

The PCC is conducting a review to determine how the acquisition of Uber would affect the ride-sharing market, as well as its impact on the thousands of its partner drivers who could be displaced. — Aerol John Pateña (PNA)

Comment on this post