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The Real Score: Is Grab’s P2-per-minute travel charge illegal?

Photo from Grab Philippines Facebook page

Update: (April 18)

In a recent briefing (April 18), Grab Country Head Brian Cu admitted that they failed to inform passengers about the implementation of the additional P2 per minute travel charge in July 2017. But he insisted that there is nothing illegal when Grab did that because fares in TNCs are “not a pre-agreed per minute or per kilometer fare.” Cu added that what matters is that passengers are informed of the exact fare they will shoulder when booking rides through the Grab app. Grab also cited LTFRB Department Order 2015-011 that allows TNCs to set their own fares, though with oversight of the agency.

 

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Grab Philippines is becoming a staple in news headlines these days. After buying Uber a few weeks ago and getting into the process of taking over the acquisition’s local operations, the ride-hailing service company is now facing allegations that it has been illegally charging all its passengers with additional P2 per minute on top of basic fare and another P40 flag down rate.

The Land Transportation Franchising and Regulatory Board (LTFRB) is giving Grab an opportunity to answer such allegations through a dialogue on Tuesday (April 17). The public transport watchdog has summoned the company to explain why the agency should not cancel its accreditation over such travel charges.

LTFRB knows
But before the April 17 discussion, Grab already dismissed the overcharging accusation, emphasizing that the LTFRB has been aware of its price structure. In an official statement, the company denied the allegation that the LTFRB has not been aware of the additional charge in question.

Grab Philippines’ Public Affairs Head and Spokesperson Leo Gonzales explained Grab’s claim to transparency. “Department Order 2015-011 allowed TNCs [transportation network companies] to set its own fares with the oversight of the LTFRB,” he told the Inquirer this week. “In June 2017, Grab, upon review of its pricing structure, initiated per minute pricing of P2. This was integrated to the existing per-kilometer charges and is not added to the upfront fees.”

Fair fare structure
Gonzales reiterated that the per-minute charge was implemented to make sure that their TNVS drivers will still earn income to support their needs despite road traffic congestion issues that are common these days. He recalled that in July 2017, Grab already explained its side over this charging concern when it presented its business model, supply and demand models, and prevailing pricing structure to the LTFRB.

The spokesperson added that this per-minute charge has always been part of their fair structure, emphasizing that Grab has been “continuously transparent about this truth.”

On Wednesday (April 11), the LTFRB also ordered Grab to lower its surge pricing rate during peak hours from 2 times to 1.5 times.

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