We Grab on to an Uber-less present

DESIGNATED DRIVER - Kap Maceda Aguila - The Philippine Star

If you’re a registered Uber rider like me, you would’ve gotten an e-mail last Sunday saying the “Uber app will not be available in the Philippines starting April 16, 2018… You have the option to download the Grab app and register in order to book rides starting that date.”

So, despite the overt protestations of Philippine Competition Commission (the country’s antitrust watchdog) that wanted to keep Uber open to prevent a monopoly of TNVS (transport network vehicle services) by Grab, Uber is done for the foreseeable future. But let’s be clear, keeping the Uber app alive and kicking wasn’t precluding anything, as the Uber boys and girls had packed up their things back in March. What was passing off as Uber on your app was really Grab Philippines soldiering on because government wanted it to.

Now that Grab officially has no one to, um, share the ride-sharing market with, there’s a virtual bullseye on its back. Everyone is understandably going to look at how the business and its drivers conduct themselves.

If you go by the flood of sentiment on social media, one thing is clear: People are missing Uber. No matter where you stand on the propriety of the transport network company’s pullout, a sizeable chunk of the commuting public is feeling sepanx (that millennial term for “separation anxiety,” I was told).

At the outset though, it must be pointed out that the exit is not merely from the Philippines, but eight countries of Southeast Asia including Singapore, Indonesia, Thailand, Malaysia, Vietnam, Myanmar, and Cambodia. According to a CNN report, Uber had “invested a total of $700 million in the region,” and now cedes its operations in exchange for 27.5-percent stake in its SEA-headquartered competitor Grab. This share is reportedly worth a cool US$6 billion, and Uber is showing some smarts by yielding to the more firmly entrenched service, which operates in close to 200 of the region’s cities. From a global standpoint, consider that Uber has already sold off its business in China in 2016, and in Russia last year. This apparently is in preparation for an IPO in 2019.

But back to our local scene, the inevitable question is: What now? Well, if you’re still not too keen about going back to taxis and their surly drivers who have the penchant for ignoring the meter and striking up a “contract,” Grab is stepping in for your consideration (if you’re not yet a Grab rider, that is).

However, new pain points are starting to emerge for riders accustomed to Uber. First, there appears to be a premium for Grab’s service. STAR Motoring Editor Manny de los Reyes’ daughter used to pay P150 to P180 for an Uber ride to school; that figure is now up to not lower than P200. (She was charged P286 this morning for the 9-km ride.—Ed.) Another editor reportedly shelled out P350 for a ride that used to cost P200.

“Before Uber’s closure, I would look at the same trip at the same time on both apps. A P200 (with surge) ride with Uber would cost P320 with Grab,” rued a friend. In another instance, a rider reportedly tried booking a trip from Essensa in Bonifacio Global City to St. Luke’s (also in BGC). The indicated cost was P400.

In response to our text message, Grab Philippines government communications manager Fiona Nicolas said, “(Grab) already complied with LTFRB’s order in capping surge pricing (multiplier) from 2x to 1.5x. Grab immediately implemented the new surge rate the same day after the Board gave its orders.”

To those unfamiliar, there are some fundamental differences between Grab and Uber—chief among them is how the apps handle ride requests. With Uber, drivers cannot see the destination of the passenger; Grab shows its drivers that information, so they can opt to accept the passenger or not. The caveat here is that Grab provides incentives to drivers who do not snub passengers, and these Grab partners need to keep acceptance rates up and cancellation rates down—In addition to getting a minimum average rating.

As a result, there has always been a perceived bias for both apps: Grab for the driver; Uber for the passenger. I’ve had Uber drivers who lamented about how the app would take them all over the metro, while Grab drivers like the flexibility of planning trips—particularly when they are on the way home. Said Gonzales, “Grab seeks to always ensure a balance in fare to benefit both our passengers and drivers.”

He proffered that Grab’s high rates reflect the law of supply and demand. “We (presently) have a low supply of drivers since Uber drivers are still ongoing onboarding with Grab, while most of Uber passengers have already downloaded (our) app.” Users will be happy to note that once the process is done, the fares will improve, he promised. This is something Gonzales has also reiterated in other media fora.

Grab Philippines also expressed alarm over instances where exorbitant rates are registered, and vowed to “do its best to address these issues.”

While the government works to certify new TNCs, it will certainly be in Grab’s interest to expedite the improvement of its fare system and service. The reward is pretty sweet: People won’t be pining for Uber anymore.

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