Antitrust body OKs Grab-Uber deal, sets conditions

Aika Rey
Antitrust body OKs Grab-Uber deal, sets conditions
Any breach of the fair pricing conditions and service quality commitments set by the Philippine Competition Commission will subject Grab to fines of up to P2 million per violation

MANILA, Philippines – The Philippine Competition Commission (PCC) has bound ride-hailing company Grab Philippines to fair pricing conditions and service quality commitments for acquiring Uber.

The PCC released its decision on Friday, August 10 – 70 days after Grab first submitted commitments to address concerns of “virtual monopoly” of the ride-hailing service.

  • Service quality – Commit to bring back average acceptance and cancellation rates before the Grab-Uber transaction, as well as faster response time to rider complaints. 
  • Fare transparency – Revise receipt to show the fare breakdown of the trip, including distance, fare surges, discounts, promo reductions, and per-minute charges if reinstated by the Land Transportation Franchising and Regulatory Board.
  • Pricing commitment – Grab must not have “extraordinary deviation” from the minimum allowed fares. Prices cannot deviate by 22% prior to the acquisition deal.
  • Removal of “See Destination” feature
  • Driver/Operator non-exclusivity – Grab is not allowed to introduce policy that would result in drivers and operators being exclusive to the ride-hailing company. 
  • Incentive monitoring – The PCC will monitor the incentive scheme of Grab to its drivers that may affect its competitors’ conditions of entry. 
  • Improvement plan – Grab must implement driver performance standards, adopt a passenger code of conduct, dedicated service lines for labor regulations, and a driver rewards’ program.

Any breach of the conditions will subject Grab to fines of up to P2 million per violation. Unwinding the acquisition deal is still a possibility, depending on the gravity of the violation.

The commitments are enforceable starting Friday, the PCC said.

“In effect, while Grab operates as a virtual monopolist, the commitments assure the public that quality and price levels that would prevail are those that had been [there] when they still faced competition in Uber,” PCC Chairman Arsenio Balisacan said.

DECISION. Philippine Competition Commission Chairman Arsenio Balisacan on Friday, August 10, reads the decision of the antitrust body that binds Grab to price and service quality conditions. Photo by Aika Rey/Rappler

Monitoring: Compliance to the commitments will be monitored by a third-party body that will independently monitor Grab for a period of one year. 

“Grab can apply to release themselves from the commitments if there are already sufficient competition in the market. But Grab cannot be released from the commitments in the first 6 months,”Antitrust Commissioner Stella Quimbo said. 

The LTFRB has recently approved 5 new ride-hailing companies, but Grab still dominates the market after its acquisition of Uber. (READ: How much are the fares of new ride-hailing apps?)

In April, the PCC launched its own review of the acquisition deal between the two companies. The review was suspended when Grab submitted voluntary commitments in June that would address the concerns of PCC on pricing and service quality. – Rappler.com

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.