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Manila Bulletin devider Business devider Grab fares soar as driver supply falls short of demand

Grab fares soar as driver supply falls short of demand

Published Sep 11, 2024 06:21 am

Ride-hailing app Grab Philippines has recently increased its fares. The reason? A growing number of people seeking rides combined with a shortage of drivers.

In an interview on TeleRadyo Serbisyo on Wednesday, Sept. 11, Booey Bonifacio, Grab Philippines' director for public affairs, explained that the pricing adjustments reflect basic economic principles, where demand exceeds supply.

To illustrate her point, Bonifacio referenced the growing population of Metro Manila, which is estimated to be around 15 million. 

She noted that even with a conservative estimate that 30 percent of this population—approximately 4.5 million people—attempts to book a Grab ride, the demand far exceeds the number of authorized Transportation Network Vehicle Service (TNVS) slots. 

The Land Transportation Franchising and Regulatory Board (LTFRB) has limited these slots to between 40,000 and 50,000.

The impact of this shortage extends beyond peak hours, affecting customers, particularly those in the business process outsourcing (BPO) sector, during off-peak times as well.

Despite concerns over fare increases, Grab assured customers that the additional rates go directly to the drivers. 

“While we do take a commission, the lion's share of the surge pricing is really for the drivers. This serves as their incentive,” Bonifacio stated. 

She, meanwhile, assured that Grab has been actively coordinating with the LTFRB to secure an additional slots of TNVS.

Currently, the base fare for a ride is approximately P45, with an additional charge of P15 per kilometer and P2 per minute.

Furthermore, Grab has warned drivers against exploiting the surge pricing feature and encouraged passengers to report any incidents that may arise.

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