LTFRB’s 50% surge cut could affect ride availability, warns Grab

Grab Philippines said it respects and accepts the government’s order to slash surge pricing for Transport Network Vehicle Service (TNVS) trips by 50%, but warned that the temporary measure could unintentionally hurt drivers and weaken ride availability during the holiday rush if not carefully implemented.

“Grab has always been a partner of the government, and we share its commitment to easing the daily burdens of our kababayan. It is in this spirit that we respect and accept the recent DoTr-LTFRB decision to temporarily reduce surge prices by 50%,” the company said in a statement released Friday.

The ride-hailing firm stressed, however, that while the cap may ease immediate costs for commuters, it risks shifting the pressure onto drivers who incur longer travel times, heavier traffic, and higher fuel consumption during the holiday season.

“It is important to emphasize that surge pricing helps ensure driver availability during peak hours, bad weather, and high-demand periods. A significant reduction in surge fees may discourage drivers from going online when they are needed most, ultimately affecting service reliability for commuters,” explained the company.

Grab’s statement comes after the Land Transportation Franchising and Regulatory Board (LTFRB) issued Memorandum Circular No. 2025-___, ordering all accredited transport network companies (TNCs) to temporarily cut surge pricing nationwide from Dec. 17, 2025 to Jan. 4, 2026.

The circular directs TNCs to reconfigure their fare algorithms so that surge pricing cannot exceed the combined per-kilometer and per-minute rates set under MC 2019-036. The LTFRB said the move responds to mounting commuter complaints about steep TNVS fares during weather disturbances, peak hours, and high-demand periods throughout the past weeks.

The LTFRB has committed to compensatory adjustments to address possible losses to be incurred by TNVS drivers. These include additional compensation for pickup time and increase in time-based charges to reflect holiday traffic conditions.

Grab acknowledged the greater demand for TNVS, but pointed out that these same conditions necessitate additional compensation for its driver-partners. It said, “we hope to ensure that the policy’s implementation does not unintentionally shift the burden from riders to our drivers, who we believe deserve fair compensation for the extra time, effort, and fuel required to navigate holiday congestion and safely serve the riding public.”

The company added that surge pricing plays an essential role in ensuring drivers go online “during peak hours, bad weather, and high-demand periods,” ultimately benefiting commuters through improved ride availability.

“Ultimately, the most sustainable solution to our transportation challenges is the continued development of a strong, efficient, and reliable mass transport system. Grab fully supports the government’s long-term efforts to improve public transportation infrastructure, and we believe TNVS services are most effective when they complement — rather than replace — efficient and affordable mass transit options,” the company said.

Despite its concerns about the new government directive, Grab reiterated its willingness to cooperate fully with the LTFRB’s review of TNVS fare structures, saying it remains committed to “solutions that protect passengers while also safeguarding the livelihood of our drivers — the people who keep our transport system moving every day.”

Under the circular, TNCs must submit detailed compliance reports — including old and revised fare algorithms and screenshots showing the new capped fares — on or before Dec. 17. Those that fail to comply cannot impose any surge pricing during the effectivity of the order.

Companies found circumventing the cap face sanctions including fines, suspension, or cancellation of accreditation.

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