LFTRB orders Grab to stop P2 per minute charge

April 19, 2018

The Land Transportation and Regulatory Board (LTFRB), in an order decided on Tuesday but released Thursday, has ordered Grab Philippines to stop imposing P2 per minute travel charge to its riders.

This came after people complained of the high charges by Grab now that it has become virtually the largest transport vehicle network service after Uber sold its Southeast Asian operations to Grab.

Grab earlier said they imposed a P2 per minute travel charge to its riders to ensure income for its drivers as 80 percent of the fare goes to drivers as part of their earnings.

The remaining 20 percent is remitted to Grab which the company reinvest for driver incentives and passenger promos.

In a separate statement, Grab said it will file a motion for reconsideration of LTFRB's order suspending the imposition of P2 per minute fare component.

Grab insisted the P2 fare component was based on a Department of Transportation order in 2015 authorizing Transportation Network Companies (TNCs) to set their own fares., a statement by the company said.

If the P2 per minute fare component is stopped, Grab said drivers will not earn enough and will be left with no option but to leave their job.

"This order sounds populist but is actually anti-people because it will hurt the drivers and the passengers more," Brian Cu, Grab country head said. “The P2 fare component is not a Grab income since 80 percent goes to the driver, and the 20 percent left is used for additional driver incentives and passenger promos,” Cu added.

"We hope the public realizes that this P2 fare component was implemented for their own benefit and not Grab's," said Cu.

"This unilateral fare-setting prerogative was taken away in 2017 in a new department order but fares set before that will remain and only future adjustments are covered," added Cu.

“The  2015 order did not require TNCs to file petition on fares; neither were we required to inform LTFRB. Even so, we still informed LTFRB during a technical working group meeting and in an official email."

The 2015 department order on TNCs being allowed to set their fares said in part: "Fare: As set by TNC, subject to oversight from the LTFRB in cases of abnormal disruptions of the market..."

The P2 was implemented only in July 2017 to protect drivers' income from traffic  and far pick-up locations.

"If our drivers lose income because of traffic in Metro Manila, they might stop working as a TNVS driver and that would mean fewer vehicles to serve the public." Cu said.

The  LTFRB approved the accreditation of Hype Transport Systems Inc. and Hirna Mobility Solutions Inc. as new  TNCs for two years.

Other companies that are seeking accreditation by the LTFRB are Owto, Go Lag and iPara. DMS