Grab PH Head: Fears of fare surges ‘unfounded’

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Metro Manila (CNN Philippines, April 3) — Fears about potential fare surges have hounded ride-sharing app Grab since it acquired the Southeast Asia operations of rival Uber last month.

Grab Philippines Country Head Brian Cu, however, said these fears are "unfounded," as the company has not changed its pricing policy in the past year.

"As a public service company, our prices are regulated by the LTFRB (Land Transportation Franchising and Regulatory Board), so we cannot unilaterally decide to raise prices. Fears of price increase because we have a high market share are, I would say, unfounded," Cu told CNN Philippines' News Night on Tuesday.

He added the perception of Grab's higher prices may be true for former Uber consumers who made the switch after the merger.

"Uber prices were historically lower than Grab. In fact, Uber was petitioning to raise prices before the acquisition happened," Cu said.

Uber will turn over its services to Grab on April 8. Users may book their rides using the Grab app starting April 9.

READ: Uber to transition services over to Grab in April

LTFRB Board Member Aileen Lizada explained the perceived surge in the price of Grab fares the past few days.

"For Uber it's 5-point-something per kilometer. But Uber before, they used to surge times 5. Although their per kilometer seems to be much lower than Grab, they are allowed to surge times 5 before. That was their fare structure but since we only allowed surge times 2 nasama sila sa cap sa ceiling," Lizada said.

She said the two TNCs have different fare structures. Grab is charging 11 to 14 pesos per kilometer while Uber is only 5.7 pesos per kilometer. 

Lizada also explained the flexibility of pricing when demand surpasses supply of available units.  

"Past week, Holy Week maybe, most of these drivers were out with their families so that's why there's lesser number of TNVS who are willing to go online," Lizada said.

Meanwhile, the Philippine Competition Commission (PCC) is conducting a review of the merger between the two transport network companies, as it is seen to affect partner drivers and commuters.

PCC Commissioner Stella Quimbo said the anti-trust body found "some indication that Grab prices are higher" during a preliminary assessment of prices in selected areas and times.

"A lot of consumers have complained, legislators have raised concerns, so this clearly is a very important issue imbued with public interest," Quimbo added.

READ: Philippine Competition Commission reviews Grab-Uber merger

She said the review will provide a "more systematic, more expansive, [and] more rigorous assessment of price changes, if any."

Quimbo said the PCC has the power to either prohibit or allow a merger. It can also impose possible pricing remedies depending on the findings of the review.

The first phase of the review can take up to 75 days, with the second phase taking up to 125 days. Quimbo said, however, the PCC wants to finish the assessment as soon as possible.

READ: No Grab monopoly: 3 ride-hailing companies applying for accreditation

Meanwhile, netizens on Twitter have aired their thoughts and recent experiences with Grab's fares as Uber nears its final day of operation.

 

Users shared their dismay and fear over the coming weeks once Uber merges with Grab, given the wide fare gap between the ride-hailing apps. Grab is reported to be charging more than Uber.