Besides refund, Grab must be fined P270 billion — Nograles

P270 billion. That’s the fine the ride-hailing firm Grab must pay for charging an unauthorized P2-per-minute from millions of rides since 2017. The whopping sum is based on the government’s penalties for illegal exactions by public transports. The fines are imposed on erring operators of jitneys, buses, taxis – and emergent ride-hailing or transport network companies.

Grab’s un-allowed per-minute rate amounts to overcharging, says Rep. Jericho Nograles. It had no permission from transport authorities, so must be punished. The P270 billion is separate from the P3.24-billion refund to customers that Nograles is demanding from Grab, for the same unwarranted P2-per-minute.

The Land Transportation Franchising and Regulatory Board (LTFRB) must enforce the P270-billion fine, Nograles adds. From public hearings, the quasi-judicial agency sets the fares that public transports may collect from riders. The penalty is stated in Joint Administrative Order No. 2014-01, dated June 4, 2014, of the Dept. of Transportation, the Land Transportation Office, and LTFRB.

JAO 2014-01 fines franchisees (operators) P5,000 for every offense of overcharging. Grab admits to starting the travel-time rate on June 17, 2017, and stopped it, on LTFRB’s order, on Apr. 20, 2018. It ran 54 million rides during the ten months, Nograles estimates from Grab’s claims of market shares. So, P5,000 x 54 million = P270 billion.

Customers never knew about Grab’s per-minute charge until Nograles exposed it in April. There was no public hearing before Grab began it in June 2017. It is not contained in the LTFRB order of Dec. 27, 2016, that sets Grab’s per-kilometer rate at P10-P14 and surge rate of up to two times, from the base fare of P40. Grab’s fare notices and official receipts to riders do not state it either. Until taken down upon Nograles’ exposé, Grab’s website bragged that it did not charge customers a cent for sitting through Metro Manila traffic. Even LTFRB chairman Martin Delgra appeared surprised to learn about Grab’s P2-per-minute when asked to react to Nograles’ revelation.

Nograles found out about the travel-time rate while computing the charge for a Grab ride from Makati City to his Batasan office in Quezon City. Noting a discrepancy in the base and travel-distance charges (there was no surge rate then), he pressed Grab’s call center for details. It was of no help. So he went to Grab public affairs director Leo Gonzales, who admitted the P2-per-minute.

Confirming the per-minute rate it began in June 2017, Grab claimed that it informed the LTFRB the following month during a technical workshop. If so, the LTFRB officials present then must explain to the public the secrecy over the travel-time charge.

In the LTFRB hearing in Apr., Grab invoked DOTr Order No. 2015-011, of May 8, 2015, for its P2-per-minute. The order ostensibly lets ride-hailing firms set their own rates, subject to “LTFRB oversight.” Chairman Delgra and Board Member Ronaldo Corpus retorted that the LTFRB’s rate-setting authority, which it exercised over them, is weightier than mere oversight. Board Member Aileen Lizada was absent from that hearing. Nograles, who has a pending bill to regulate transport network companies, attended as a customer.

Nograles wants Grab to refund its customers P3.24 billion, the unwarranted per-minute charge of P2-per-minute in June 2017-Apr. 2018. Assuming an average of 30 minutes per ride, he said Grab secretly collected P60 from each of the 54 million rides. The LTFRB set a hearing on it on May 29.

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