RIDE-HAILING services such as Grab are overly regulated in this part of the world, and putting too much pressure through policies on fares and supply will be detrimental to the fairly young segment of the transport sector.
This was how Brian P. Cu, who heads Grab Philippines, described the regulatory environment in the country’s app-based ride-hailing industry, which it dominates today.
“We’re saddened that we are being over-regulated, but we still believe in the potential of the Philippines. How can we grow if we can’t add cars?” he said in an interview on Friday night.
Today, the suppl of transportation network vehicle services (TNVS) —or peers —is capped at 66,750 vehicles: 65,000 for Metro Manila, 2,500 for Cebu and 250 for Pampanga.
“We’re the slowest in the region because everyone else can add cars. This goes to show that we are limited in terms of expansion,” he said.
This has caused the huge gap between supply and demand for the service, Cu said.
Grab receives about 600,000 booking requests on a regular day, but on “peak days” it receives about 800,000 booking requests.
It has a 35,000-strong fleet of TNVS-registered cars. On the average, a driver can do about 12 trips per day, translating to a capacity of 396,000 booking requests daily.
According to Cu, the Philippines comprises about 6 percent to 10 percent of the whole operations of Grab in the world.
“It’s an important piece of our portfolio because this is where the Grab brand was created. So it was very close to the heart of the founders,” he said.
Hence, his group would very much like to continue providing the service in the country, despite projecting a P7.5-billion net loss in the next one and half years.
He hopes the regulator will “fix” what it deemed irregular in terms of prices, and “allow” more cars to provide the service in the coming months.
The rate card for a Grab ride, now regulated by the Land Transportation Franchising and Regulatory Board (LTFRB), follows: P40 base, P10 to P14 per kilometer charge and a surge capped at 2x.
Grab is in the middle of a legal tussle after the regulator ruled that it had overcharged its passengers from June last year to April this year for including a P2-per-minute charge on its fare matrix.
It slapped Grab with a P10-million fine for it.
Cu said his group will “exhaust all legal and administrative” means to negate the ruling, claiming his group imposed the charge on the basis of a now-overturned order by the previous administration’s transport department.
“We’re going to file an appeal by way of motion for reconsideration for the decision because we believe everything that we did is above board,” he said.
Cu said the fare component is allowed under a previous department order issued by the then-Department of Transportation and Communications. That order was rescinded last month, when the Department of Transportation officially bestowed full regulatory and supervisory powers to the LTFRB over transport network companies and
TNVS operators.
He explained that the P2-per-minute charge was part of the presentation and discussions during Grab’s technical working group meeting with the LTFRB en banc in July 2017.
The said rate was also sent via e-mail to LTFRB Chairman Martin B. Delgra III on August 14, he said, noting that no concerns were raised on an e-mail response from Delgra’s office.
“We will file the motion for reconsideration before Friday,” he said.
Should his group lose this fight, Grab is ready to pay the fine, said Cu.