Grab must return P14M to riders, pay P2-M fine
MANILA, Philippines — The Philippine Competition Commission (PCC) on Wednesday ordered the ride-hailing monopoly Grab Philippines to return around P14 million in overcharges to its customers and to pay a fine of P2 million for too many driver-initiated ride cancellations this year.
Grab was monitored by the PCC for one year starting August 2018 and found that it had overcharged riders and its drivers canceled too many bookings from May to August this year.
The commission slapped fines on the company amounting to more than P39 million, largely for overcharging. It ordered that P19 million be refunded to customers, including the P14.15 million May-August 2019 overcharges.
Because it had no real competitor, the PCC recently revised the conditions imposed on Grab to include a “disgorgement mechanism,” a process in which ill-gotten money is paid back or returned.
It said the P14.15 million must be paid back to Grab’s customers within 60 days and the P2 million to the agency within 45 days.
Grab said it would comply but called the money to be returned to its riders a mere “disbursement.”
“As the new monitoring year begins with the new systemwide average monitoring scheme, Grab is hopeful in fulfilling its commitments to the PCC,” the company said in a statement on Wednesday.
It, however, added that “pricing will still be influenced by factors such as lack of supply, and the traffic situation.”
The PCC tapped London-based audit firm Smith & Williamson to look into Grab’s operations for a year after it acquired Uber, then its only competitor in the ride-hailing business.
When the disgorgement mechanism was announced last month, Grab insisted that it did not overcharge and only followed the fare matrix set by the Land Transportation Franchising and Regulatory Board (LTFRB).
“You can be legalistic about it, but the point is you committed [to keep rates low]. In any case, the longer-term solution to this is really to have an effective competitor to Grab,” PCC Chair Arsenio Balisacan told reporters in an interview earlier this month.
“[It has to be] another player, just like Uber, who has deep pockets, because from our analysis, none of these small players will be able to compete effectively with that kind of resources Grab [has],” Balisacan said.
The PCC orders came as the price of booking a Grab ride in the middle of the day””not to mention during rush hours””this holiday season had skyrocketed.
Noting complaints of exorbitant rates, a party list representative urged Grab to “moderate your greed” while a senator called for an investigation of its alleged poor services.
In her resolution calling for the probe, Sen. Imee Marcos said that aside from the high rates, commuters also complained about difficulties in booking a ride from Grab.
Grab explained that there were 3 million booking requests every day, based on data from last week. It said it could only serve 400,000 riders per day, with about 36,000 drivers on the road.
Marcos said Grab was supposed to cap its fare increases this month at 22.5 percent of its average rate.
The PCC had set a monthly fare cap for Grab based on its monthly fares before the company acquired Uber in March 2019.
The agency said the cap rate was confidential but included a certain range within which Grab could still raise its fares.
For most of the year, including this December, the range was up to 22.5 percent. Any excess was to be refunded to Grab customers.
The LTFRB has summoned Grab over complaints of “unreasonable price surges” from passengers since the start of the holiday season.
LTFRB Chair Martin Delgra said he would look into alleged price-gouging, reminding transport operators to adhere to the approved fare matrix and a cap on surge rates.
Puwersa ng Bayaning Atleta Rep. Jericho “Koko” Nograles on Wednesday said the LTFRB should ensure that Grab would solely shoulder any fines imposed on it, and not pass them on to customers.
He expressed concern over the “excessive”commissions that Grab has been getting from its drivers.
“Even just until the end of December, please moderate your greed. Leave some for your drivers,” he said.
He said the charges that Grab had supposedly been imposing were taking a toll on its drivers, which was aggravated by the heavy holiday traffic.
Nograles urged Grab to give discounts to its loyal riders and drivers during the Christmas season by lowering its surge prices.
“Have mercy on the riding public who are left without a choice but use your ride-hailing services,” he said.
—With reports from Leila B. Salavereria and Melvin Gascon
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