Grab says driver shortage, regulatory constraint caused fare surge

Ride-sharing firm Grab Philippines has blamed the surge on its fares to the lack of supply of car units amid increasing passenger demand.

Photo credit: Grab

Grab made the statement following concerns aired by the Philippine Competition Commission (PCC) that its actions have drastically lessened market competition by unilaterally raising its prices while the quality of services has declined through longer waiting times for booking rides and increasing incidents of driver cancellations following its acquisition of the regional operations of erstwhile rival Uber.

“We are of the view that any perceived increase in price is not an exercise of any market power, but the result of demand and supply imbalance given the current shortage of available drivers and the regulatory constraint relating to the Transport Network Vehicle Service (TNVS) cap, which are outside of our control,” the firm said in a statement Wednesday, May 30.

It added that the situation is likely to be temporary given the Land Transportation Franchising and Regulatory Board’s (LTFRB’s) accreditation of new transport network companies (TNCs).

Grab said it would continue to address PCC’s concerns.

“We are presently engaging with the PCC to understand what it believes are the bases for its conclusions and to ensure that the PCC also has the benefit of our regulatory and market analysis, which would show that the transaction has no anti-competitive effect,” the company said.

Grab is set to file a comment to further clarify concerns raised by the PCC, as it expressed hope the latter would “fairly assess” their arguments.

“Rest assured, we understand the need to promote robust competition and consumer welfare and remain committed to engage with the PCC, the LTFRB, and other government agencies to ensure a competitive TNC industry,” it said.

Grab had earlier said it is seeking for the migration of around 6,000 drivers to its platform who were displaced following the halt of Uber’s operations last April. It currently receives about 600,000 passenger booking requests each day but only 35,000 vehicles are available to serve the riding public.

The company likewise stated that the suspension of the P2-per-minute charge by the LTFRB has resulted in the lessening of its drivers on the road.

The firm has assured riders that it has been implementing various initiatives to improve the quality of their services.

Grab has recently launched its 100-day plan which aims to improve driver behavior and welfare, provide better ride experience and upgrade customer support. — Aerol John Pateña (PNA)

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