Grab declares its fares are ‘legal and upfront’

Published May 31, 2018, 3:05 PM

by iManila Developer

By Alexandria Dennise San Juan

After being grilled by transport regulators for its “unauthorized” minimum charges, ride-sharing giant Grab Philippines maintained that all its fares are “legal and upfront” as they are allowed to set their own fare.

A Grab employee uses the app to book a cab for passengers at the Ninoy Aquino International Airport (NAIA). (REUTERS/Romeo Ranoco / MANILA BULLETIN)
A Grab employee uses the app to book a cab for passengers at the Ninoy Aquino International Airport (NAIA). (REUTERS/Romeo Ranoco / MANILA BULLETIN)

“All fares by Grab are legal and upfront and covered by a Department of Transportation Order in 2015 which allowed Transport Network Companies (TNC) like Grab and Uber to set their own fares,” Grab Philippines Public Affairs Head Leo Gonzales said.

The statement came after the Land Transportation Franchising and Regulatory Board questioned the TNC for charging minimum fares to its passengers without the board approval.

During the hearing at the LTFRB office on Tuesday, LTFRB chairman Martin Delgra III was surprised when Grab’s legal counsel confirmed they were charging P80 and P125 minimum fares for passengers traveling less than three kilometers.

The matter was brought up by PBA partylist Representative Jericho Nograles who claimed that Grab is imposing an P80 and P125 minimum fare for its Grab Car and Grab Premium services, respectively, without authorization from the Board.

Grab said that it is imposing minimum fares to ensure that drivers are “well-compensated” for any trip even for short distances.

However, Gonzales reiterated that these fares being charged by Grab are legal and covered by a Department of Transportation Order in 2015 which allowed TNCs to set their own fares.

Grab said that the DO 2015-11 did not require TNCs to file petition on fares, nor did it require them to inform LTFRB.

Gonzales said that even the Board confirmed this in a February 2016 decision saying the DO is “valid, legal and subsisting until nullified by court.”

The LTFRB decision also said the DO was issued to “promote mobility” and respond to the needs of the modern commuter (who is)…able and willing to pay more for better transport services.”

The ride-hailing company also questioned Nograles’ motive on his complaints, adding that he might be “rocking the boat for his political ends, not really to protect the riding public.”

Grab cited the lawmaker’s bill in the Congress wanting the TNCs to set their own fares.

Under the Section 11 of House Bill 6009 proposed by Nograles, it stated that a “TNC is hereby authorized to set fares but shall disclose the fare calculation method, the applicable rates being charged, and the option for an estimated fare to a passenger before the passengers arranges a trip with the transport network driver.”

“Because of his efforts, the P2 per minute fare component was suspended by LTFRB. This reduced the income of drivers and discouraged them from going out and serving our passengers. That is why we have an extreme lack of vehicles and why the public find it hard to get a ride,” Gonzales said.

The P2 fare component, he said, is also legal because it was imposed at the time that the 2015 DO was still in effect.

According to Gonzales, the DO was taken back when a new one was issued in August 2017 requiring all fares to be approved by the LTFRB moving forward.

“So how can Nograles claim the fares are illegal when the fares have always been upfront and the DO allowing us to set fares with LTFRB’s oversight was in effect? The riding public is suffering because of Nograles’ mistaken claims,” he asked.

The DO, said Gonzales, was issued when the ride-hailing service was new and the government at that time was looking for ways to give the public another transport choice.

“That DO actually put the Philippines way ahead in the region as far as support for TNCs and it was the reason the ride-hailing service here blossomed immediately. Unfortunately, we are now back to the real world again because of politics,” he concluded.#