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Here’s why LTFRB wants Grab and other TNCs to raise fares soon

The Land Transportation Franchising and Regulatory Board (LTFRB) wants transport network vehicle services (TNVS) and transport network companies (TNCs) to raise fares soon.

The transportation watchdog asserts that these are premium services. Thus, for the agency, these TNCs must charge greater fares than that set by regular taxis.

“It has to be higher than the taxi para hindi natin ma-displace ang taxi operations,” said LTFRB board member Aileen Lizada. At this point, there is no available estimate yet about how much the base fare of TNCs and TNVS could increase.

Upcoming taxi fare hike
This will come along with the upcoming hike in metro taxi fares, which will keep a P40 flagdown rate but will impose higher charges of P13.50 per kilometer (from about P10.50 per kilometer) and an additional time-based P2 per minute fee. This is a hike petition that was approved in October 2017 to be implemented a few weeks from now.

The LTFRB has already conducted a dialogue with various TNCs to discuss their planned rate range. These companies are expected to submit their proposed fare structures by next week (week of June 25). However, such proposals must be within the range to be set by the regulator.

The LTFRB got the authority from the Department of Transportation last week to take the power to subject TNCs and TNVS to its full regulation and supervision especially when it comes to pricing.

Much ado about the P2-per-minute charge
Currently, all four TNCs (Go Lag, Hype, Owto, and Grab) impose a base fare of P40. Grab observes a per-kilometer charge of P10 to P14, while Owto charges P12, Hype sets P14, and Go Lag collects P18. In terms of surge rate, Go Lag has the least—at 1.5 times during peak hours—while the rest implements 2 times surge charging.

Go Lag and Owto presently collects P2-per-minute charging. Grab had implemented this fee from June 2017 to April 2018, when the LTFRB ordered it to temporarily scrap it. That time, Grab was asked to rebut overcharging accusation.

Related article: Is Grab’s P2-per-minute travel charge illegal?

“In June 2017, Grab, upon review of its pricing scheme, initiated per minute pricing of P2. This was integrated to the existing per-kilometer charges and is not added to the upfront fees,” Grab Philippines’ Public Affairs Head and Spokesperson Leo Gonzales explained then. Now, the company is asking LTFRB to let it resume that charge since Owto and Go Lag, and soon the taxis are allowed to implement it.

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