Grab PHL to spend P100 million monthly on driver subsidies
GRAB Philippines (MyTaxi.PH) said on Tuesday it expects to spend over P100 million every month on a “fare-subsidy” scheme for its drivers, who are affected by the suspension of the P2 per minute waiting time charge.
Grab Philippines Country Head Brian P. Cu said its computations showed that a transport network vehicle service (TNVS) driver needs to make at least P5.50 per minute or P330 per hour to cover costs related to high fuel, traffic, and vehicle maintenance.
“Since the P2 per minute component was suspended, we received a lot of painful complaints from our partners that their earnings are not sufficient anymore to make a decent living. That’s why we decided to step in,” he said in a statement.
In April, the Land Transportation Franchising and Regulatory Board (LTFRB) suspended Grab’s P2 per minute waiting time charge. Grab has maintained it was allowed to set its own fares without LTFRB approval under a Department of Transportation order in 2015.
Mr. Cu said the subsidy program will “run as long as it’s needed and for as long as we have resources to do so.”
He clarified that this subsidy is different from incentives that drivers continue to receive. With a subsidy, he said drivers will get the difference in fares on “money-losing” trips.
“If a ride from Makati to BGC takes an hour because of heavy traffic despite short distance, and fare is computed at P120 only, Grab will return to the driver the P210 difference to make sure he made P330 for that one-hour trip,” Mr. Cu said.
With the fare subsidy, Mr. Cu expressed hope the TNVS drivers will be “more willing” to take on trips.
Grab earlier said bookings average between 600,000 to 800,000 daily, but the number of TNVS drivers under Grab remains at 33,000.
On May 22, Grab filed a petition to the LTFRB to reimpose its P2 per minute waiting time charge, arguing that the fare policy is legal and other transport network companies (TNC) are allowed to impose the same charge.
LTFRB Board Member Aileen Lourdes A. Lizada told reporters that the petition will be discussed during a hearing. — Denise A. Valdez
