PCC slaps Grab new penalty of ₱14 million

Published December 17, 2019, 12:00 AM

by manilabulletin_admin


Grab Philippines has been slapped with ₱14 million in new penalty for fare breaches in the fourth quarter review, almost triple the penalty the Philippine Competition Commission (PCC) imposed against the transport network company in the last third quarter review.

Sources said PCC will issue an official statement anytime this week on its order. The fourth quarter review under the old commitment of Grab covers the period May 10 to August 11 this year.

The higher penalty was largely due to breaches to the fare in range formula of the PCC that compares the comparable fare rates during that period prior to merger with Uber.

Under the fare in range formula, Grab is not supposed to breach the 22 percent deviation allowed or else they get a penalty for the surge in fares.
The penalty actually represents the over charges on Grab riders’ fares.

The source attributed the tripling of the penalty in the fourth quarter review from ₱5 million in the third quarter review to the shortage in the supply of Grab cars.

According to Grab, there are 35,000 to 36,000 Grab cars at any given time as against the estimated ideal number of 55,000 cars to fulfill demand.

There are 70,000 to 80,000 unique requests at any given time but the effective first time allocation -(EFTA) rate last year was only at 20 percent. This means 2 out of ten requests were served. This year, however, the EFTA has already improved.

Another reason for the high fare breaches was that the transport network vehicles are supposed to be a support or augment the existing public mass transport system, but riders have instead use the transport network vehicles as a replacement to the inefficient public transport system.

In addition, the worsening traffic situation is causing further congestion and further causing demand to surge.

Meantime, Grab spokesperson Nicka Hosaka said the ₱5 million penalty in the third quarter review will be refunded to riders starting in the first week of January next year.

Under the PCC rules, Grab is given 60 days from the order to refund riders.
An estimated 3 million riders are expected to receive the fare refund.