Grab fares 'not necessarily lower' after Uber buyout approval

MANILA, Philippines – Grab Philippines said that fares "will not necessarily be lower" following the fair price and quality service conditions imposed by the Philippine Competition Commision (PCC).

In a media briefing after the PCC approved the Grab-Uber buyout, lawyer Miguel Aguila said the fares of the ride-hailing company would still be within a set range.

"What we are committed to is not to increase our fares by 22% more than what it was last year. So the fare structure can change the minimum and maximum fares... but we will [just] have to stay at a certain range," Aguila said on Friday, August 10.

This means that fares, for example, that range around P170 last year cannot be more than P200 following the PCC conditions, Grab Philippines head Brian Cu said.

In January, the ride-hailing giant applied for a 5% fare hike at the Land Transportation Franchising and Regulatory Board (LTFRB).

Aguila said that Grab's pricing scheme will rely on what the LTFRB will allow.

On Friday, the PCC approved the regional acquisition deal between ride-hailing giants Grab and Uber, but imposed conditions that Grab has to follow until there is "sufficient competition" in the market.

To meet antitrust commitments, Cu said that they have lowered their surge rates to 1.8 times the regular fare.

"The average price will still stay within range. Our way to increase revenue of our partners is not to increase in prices [but] it's providing more rides by adding more vehicles on the roads," Cu said.

Challenges: Cu noted that improving the allocation rate of drivers to passengers will continue to  be a challenge, given the LTFRB's franchise cap at 65,000 units.

"To achieve levels in which service quality goes back up to 70% allocation rate – that the LTFRB said is their basis of 'maximum supply' – would still be tough if we cannot add more cars," Cu said.

Grab earlier said that there are only around 35,000 drivers that serve 600,000 bookings per day.

This, they said, affects the booking acceptance for passengers as "demand exceeds supply."

To address this, Cu called on the LTFRB to reimpose their P2-per-minute travel duration charge that was suspended by the regulatory board, or to allow them to accept new drivers. – Rappler.com

Aika Rey

Aika Rey covers the Philippine Senate for Rappler. Before writing about politicians, she covered budget, labor, and transportation issues.

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