Grab can set its own rates, LTFRB can only intervene in crisis situations
Ridesharing firm Grab Philippines reiterated on Wednesday that the P2 per minute travel charge it imposes to its riders is legal.
The company also denied allegations that it is imposing illegal charges and that ridesharing companies have the right to set their rates in accordance with an order released by the then Department of Transportation and Communications (DOTC) in 2015.
“We are not charging any illegal fares,” Grab legal counsel Miguel Aguila told a press conference in Quezon City.
He cited Department Order 2015-11 which stated that that transportation network companies (TNCs) can set their own rates subject to oversight of the Land Transportation Franchising and Regulatory Board (LTFRB) in cases of shortage of electric power or other sources of energy; strikes; civil disorders or other cause of an abnormal disruption of the market which results in the declaration of a state of emergency by the President.
Aguila said Grab decided to impose the P2 per minute charge to ensure sustainable income for its drivers.
Eighty percent of the charge goes directly to the drivers as part of their earnings while 20 percent is remitted to Grab which is reinvested as driver incentives and passenger promos.
“What is important is for drivers to have sustainable livelihood in order to provide services to commuters,” Aguila said.
Grab has also lowered its surge price cap from 2x to 1.5x in compliance with the order of the LTFRB.
Grab Country Head Brian Cu said their only shortcoming was their failure to inform passengers of the per minute travel charge when this was first imposed on June 2017. “Riders were not informed. There were no comms to the riders,” Cu said.
There is no fare breakdown provided to riders as what they are shown upon booking is the “upfront price” or the total fare they pay at the end of the trip which includes the computation for the travel duration charge.
“The point that we like to make here is that the price for Grab is not the pre-agreed per kilometer or per minute but at the end of the trip, the sum of all those factors are charged and it’s fixed,” Cu said.
The LTFRB has directed Grab to explain its fare structure during its hearing on the PHP2 per minute charge.
The Board said that Grab has not mentioned any travel time rate when it released its order on the fare structure of TNCs last December 27, 2016.
The December 2016 order stipulates that Grab should impose a flagdown rate of PHP40 with an additional rate of PHP10 to PHP14 per kilometer excluding per minute travel charges.
Grab, however, said that it has presented its fare structure during a technical working group with the LTFRB on July last year.
The next hearing of the LTFRB on the issue is scheduled on May 29, 2018. (PNA)