Will regulator penalize Grab?

Which side is government on – the riding public or the ride-hailing big business? That depends on how the Land Transportation Franchising and Regulatory Board handles the new solo dominant Grab Cab.

Two issues involving Grab will test the LTFRB’s mettle:

First is Grab’s emerging monopoly of Philippine ride-hailing. Last month global pioneer Uber sold its Asia operation to its only serious rival, upstart Southeast Asia-based Grab. In odd marriage, Uber-Asia is to shut down but come to own 27.5 percent of Grab. In Mega Manila franchisee Grab Philippines (a.k.a. MyTaxi.PH) at once prepared to take over. Not so fast, the Philippine Competition Commission said, pending consent to the potentially vile monopolistic offspring. Singapore’s counterpart anti-trust agency also is reviewing the deal.

Meantime, Filipino riders are complaining. Since Uber’s bow-out was announced, Grab seems to have begun charging more. Regulars note a 40-percent increase in their usual fare. Has the harm of monopoly set in, they rant on mainstream and social media. No such thing, Grab assures. Just that, since Holy Week in late March followed by the long first weekend of April, many of its drivers went on vacation. Too, traffic jams became more frequent in the national capital due to road repairs and rail construction. Both automatically triggered “surge charging” of up to double the usual travel distance rate of P10-P14 per kilometer.

LTFRB swiftly moved, telling Grab temporarily to reduce its surge charge from two to only 1.5 times maximum. Grab relented, for it has a petition, pending since January to increase its charges due to higher taxes and fuel costs. LTFRB, however, hesitated to enforce the PCC’s order for Uber to continue operating, and for Grab to not yet take over. Supposedly their ride-hailing apps and customer databases already have been merged, and Uber cannot run anymore with only two employees left. This raises the question of whether Uber’s erstwhile laborers properly were separated. Also, what to do with 25,000 or so Uber’s drivers who had had to take out car loans to become TNVS (transport network vehicle servicers), under LTFRB.

Second is the exposure of Grab’s secret charges. Apparently without LTFRB’s knowledge, Grab Philippines was charging a travel-time rate of P2 per minute. Its website brags that, in consideration of customers, it does not charge them extra for sitting idle in Mega Manila’s traffic snarls. That turned out to be false advertising, at the very least, says Congressman Jericho Nograles, author of a bill to regulate ride-hailing. He had taken Grab from home to work. Habitually stingily computing expenses, he noticed a discrepancy from the advertised basic fare, plus surge rate, plus travel-distance rate. Grab call center agents from whom he requested a breakdown weren’t of any help – a second offense, he said, in not detailing its official receipt as required by law. He went up to Grab director for public affairs Leo Gonzales, who admitted for the first time a travel-time rate of P2 per minute. Nograles reported it to LTFRB, which in turn advised him to go to Grab. Nograles instead went public.

LTFRB chairman Martin Delgra expressed surprise with Grab’s unauthorized extra charges. What the agency had allowed it and Uber to charge were published in December 2016, based on separate public hearings on their respective rates. Gonzales explained to the press that Grab introduced the P2-per-minute in June 2017, and told LTFRB about it in a workshop the following month. Was there a specific public hearing for it as required by law, Nograles asks. LTFRB ordered Grab to explain on Tuesday, April 17, why it should not be fined.

Speaking of fines, Nograles says not only false advertising and hazy receipting are punishable. Customers must be refunded the unauthorized charge, which even Grab drivers didn’t know about, and likely were not benefited by it.

That refund is stupendous: P3.8 billion. Breakdown: 6,000,000 trips per month (average previously claimed by Grab) X 10.5 months (June 2017 to April 2018) X 30 minutes per trip (average) X P2 per minute.

Not yet included is the interest, Nograles says. And there could be more penalties, if LTFRB plumbs its issuances. Will it do so?

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