LTFRB lowers Grab surge pricing cap amid illegal fare allegation

MANILA, Philippines – Lower Grab fares during peak hours.

The Land Transportation Franchising and Regulatory Board (LTFRB) gave this order on Wednesday, April 11, to Grab, telling the ride-hailing service to lower its surge pricing cap during peak hours from 2.0 to only 1.5 times the normal fare.

Surge pricing was capped at twice the rates for time covered and distance traveled only, and not for the base fare.

This amends LTFRB's December 2016 order setting the fare structure of Grab. 

The order is effective immediately.

LTFRB Board Member Aileen Lizada said the board deemed it reasonable to lower Grab's surge pricing cap since consumers are left with only Grab as their option for ride-hailing services, given the latter's acquisition of Uber.

"The board directs Grab to lower its surge from 2 to 1.5. Why? [The] LTFRB is processing the new TNC players. This is to ensure that the fares will be at a rate that is conducive and acceptable to the existing number of TNVS that are transferring to Grab," Lizada said during a hearing on Wednesday.

The cap applies to all ride-hailing services offered by Grab. Lizada said that the cap would be reviewed after new players have come in.

Grab spokersperson Leo Gonzales said they understand the need for the cap to be lowered.

"We understand their justification for this. This is a critical time. As soon as new players come in, the board will have to study again. But , of course, we will comply with further downgrading the cap from 2.0 to 1.5x," Gonzales said.

The order came after Grab acquired Uber's operations in Southeast Asia, leaving thousands of patrons with only one choice for ride-hailing services. (READ: LTFRB: Uber can only operate until April 15)

The country's competition watchdog ruled against the deal, arguing that it make for a "virtual monopoly."

Meanwhile, Grab is also in hot waters as PBA Representative Jericho Nograles accused Grab of illegally charging its customers of P2 per minute for their rides. This is on top of its flagdown rate of P40 and charging P10 to P14 per kilometer, which was allowed by the board.

LTFRB Chairman Martin Delgra III said the now-amended December 2016 order "still stands" where "there is no mention of time travel rate." – 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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