THE Land Transportation Franchising and Regulatory Board (LTFRB) should add about 23 percent more slots into the so-called common base supply of transportation network vehicle service (TNVS) operators to match the demand for ride-hailing services in the Philippines.
Leo Emmanuel Gonzales, who heads the public affairs division of Grab Philippines, described the current situation in the ride-hailing market as a “supply crisis,” noting the number of driver supply in the country should be increased from 65,000 to 80,500.
“The Philippines, despite being the first Asian country to legalize ride-hailing in 2015, is facing a big setback with the current supply crisis. Supply is struggling to meet the massive demand from the riding public and only the LTFRB has the authority to address this,” Gonzales said.
He noted that replacing the inactive vehicles in the regulator’s “master list” of previous operators that have yet to get an official franchise would be a measure that could “go a long way” in improving the service.
The regulator recently opened 10,000 slots for the registration of TNVS operators that have yet to receive a certificate of provisional authority or a certificate of public convenience.
Grab, a transportion network company (TNC), receives about 600,000 booking requests on a regular day, but on “peak days,” it receives about 800,000 booking requests.
Grab 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.
This is almost half of the demand for the service, which could help improve with the addition of 35,000 more vehicles on the road.
“None of the other countries in the region have a supply problem like this. In fact, Grab’s allocation rate in Metro Manila is the lowest in Southeast Asia as only 4 out of 10 bookings are able to be efficiently served,” Gonzales said.
When Grab acquired Uber last April, only 42,000 vehicles — a number of which are from Uber — continued operating in the Grab platform. Currently, there are about 13,000 inactive vehicles in the system.
Yet, Gonzales said, the master list “has not been revisited to reflect this new reality,” despite the regulator’s saying it will review the demand for the service on a quarterly basis.
“We urgently request the LTFRB to replace inactive vehicles with active vehicles ready to serve the riding public. We also appeal to the LTFRB to increase the common supply base to 80,000 vehicles and review the demand quarterly, consistent with their earlier pronouncements. This will help bring more passengers home and allow new TNCs to scale,” Gonzales added.
This, he added, will help the new entrants in the ride-hailing market to grow, as they share the same pool of vehicles.
Image credits: Alysa Salen