LTFRB orders Grab to explain P2 per minute waiting charge

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THE Land Transportation Franchising and Regulatory Board (LTFRB) has issued a show-cause order for Grab Philippines (MyTaxi.PH, Inc.) explaining its P2 per-minute waiting time charge.

The show-cause order, signed April 12, orders the ride-sharing company to explain in writing five days after receipt of the order why its certificate of accreditation as a transport network company (TNC) should not be suspended or canceled amid allegations that it charges P2 per minute of travel time without authority from the LTFRB. The government agency also ordered Grab to appear before a public hearing on April 17.

The P2 charge is added to the P40 flag-down rate and the P10-P14 per kilometer fare.

The order was triggered by remarks by party-list Representative Jericho Jonas B. Nograles (PBA), who has said in media interviews that Grab owes its riders around P1.8 billion for the last five months due to “illegal” per-minute charges.

Grab has said it has always been transparent on pricing.

“The per-minute charges were implemented to ensure that despite serious congestion issues on the road on a daily basis, hardworking TNVS drivers would have a greater chance of making ends meet and supporting their needs. During this time, we corresponded with the LTFRB to present these changes and was given the opportunity to present in full our business model, supply and demand models and pricing structure during one of the Technical Working Group meetings in late July 2017,” Grab public affairs head Leo Emmanuel Gonzales said in a statement on Wednesday.

The LTFRB on Wednesday also ordered Grab Philippines to lower its surge rate to 1.5x from 2.0x.

The order is to be implemented immediately. Board Member Aileen Lourdes A Lizada said this is “while the petitions for accreditation of other TNCs are being processed.” Four transport network companies are applying for accreditation with the LTFRB.

Aside from these new regulation issues, Grab is also facing a review by the Philippine Competition Commission (PCC) on its deal to acquire Uber’s Southeast Asian operations.

Grab will extend the operations of the Uber Philippines (Uber Systems, Inc.) app to April 15, despite the former’s objections to the order of the PCC for the two ride-sharing companies to continue operating independently pending the antitrust body’s review. The Uber app was scheduled to go offline on April 8.

It will also bear the costs of keeping the Uber app operational until April 15, an extension of Grab bearing the costs from March 25 to April 8 which was part of the transaction services agreement between Uber BV and Grab Holdings, Inc.

The antitrust body had said the acquisition leads to a “virtual monopolization” of the ride-sharing market. — Patrizia Paola C. Marcelo