PCC extends validity of Grab’s voluntary commitments in relation to Uber purchase

MANILA, Philippines — Despite the lack of competition in the ride-hailing market, the Philippine Competition Commission (PCC) is extending the effectivity period of voluntary commitments made by Grab Philippines Inc. in relation to the conditional approval received for the acquisition of Uber, to give time for a new set of commitments to be put forward by the ride-sharing company.

In a statement yesterday, the antitrust body said it is extending the validity of Grab’s voluntary commitments which should have ended last Aug. 11, by 71 days or until Oct. 20 this year.

In August last year, the PCC approved Grab’s acquisition of Uber, subject to compliance to conditions on service quality and pricing standards to be monitored per quarter by a third party firm for a period of one year or until Aug. 11 this year.

While PCC has observed that Grab continues to top the ride-hailing market, the effectivity period is being extended to enable the parties to discuss new commitments to be made by the ride-share app.

“The task ahead for PCC and Grab is to ink a renewed set of commitments that is fair and reasonable and that protects consumers from Grab’s currently unchallenged dominance in the market. We also hope to raise the level of competitive intensity in the market and bring about market conditions conducive to new entrants,” PCC chairman Arsenio Balisacan said.

The new commitments which would be subject to negotiations, would still involve checking Grab for price surges, driver discrimination through booking cancellations, and service quality.

Should PCC and Grab fail to reach an agreement on the new set of voluntary commitments by Oct. 5, the antitrust body said it would re-evaluate the conditional approval given on the Grab-Uber transaction. 

The current voluntary commitments were designed to address competition concerns raised by the PCC on Grab’s acquisition of Uber.

Grab’s commitments cover bringing back market averages for acceptance and cancellation rates before its acquisition of Uber; providing the fare breakdown per trip; maintaining prices at levels prior to the deal with Uber; allowing its drivers or operators to register under other transport network companies; allowing monitoring of incentives given to drivers; and implementing an improvement plan for better driver performance and passenger service.

PCC said earlier any breach of the commitments would mean a fine of P2 million for every violation.

“Competition is a dynamic process in the market. Real competition springs not from presence of a new player alone, but from evident rivalry among firms in terms of capacity, price and service quality. On one hand, the commitments can keep Grab in check from exercising its market power as a virtual monopolist. On the other hand, we also advocate for allowing smaller players to grow or formidable new competitors to enter the market which will be more beneficial to the riding public,” Balisacan said.

In response, Grab Philippines legal counsel Miguel Aguila said the ride-share app is holding talks with the PCC on the matter.

“We are discussing with the PCC as to how to proceed moving forward,” he said.