LTFRB orders Grab to suspend P2/min charge

MANILA, Philippines — The Land Transportation Franchising and Regulatory Board (LTFRB) has ordered Grab to suspend the imposition of its P2 per minute charge per trip until its legality, which was questioned by a lawmaker, is settled.

In an order signed last Wednesday, the LTFRB directed Grab to “immediately” suspend its imposition of the P2 per minute charge pending an “extensive review and resolution” of the issue.

The order was signed by LTFRB chairman Martin Delgra III and board member Ronaldo Corpus.

“In order not to pre-empt whatever decision we may have on the P2, we have decided that when we have reviewed after the hearing, we thought it wise to temporarily suspend the P2 per minute charge,” Delgra told reporters.

Board member Aileen Lizada did not sign the order as she was not present during Tuesday’s hearing, which was attended by Puwersa ng Bayaning Atleta party-list group Rep. Jericho Nograles.

Delgra said it was good that Grab admitted it was unable to inform the public that it imposed a P2 per minute charge on top of the base fare and fees per distance traveled. 

In a statement yesterday, Grab said it will file a motion for reconsideration over LTFRB’s suspension order as it maintained that the P2 per minute charge was legal and based on a department order. 

The ride-sharing company warned that if the charge is not enough, the drivers may be forced to leave their work as transport network vehicle service (TNVS) providers.

“This order sounds populist but is actually anti-people because it will hurt the drivers and passengers more,” Grab country head Brian Cu said in a statement.

Grab cited the Department of Transportation and Communications Order No. 2015-011 which allowed transport network companies (TNCs) to set their own fares “subject to oversight from the LTFRB in cases of abnormal disruptions of the market.”

Grab explained that it implemented the P2 per minute charge “to protect drivers’ income from traffic congestion and far pick-up locations.”

Sen. Sherwin Gatchalian, who chairs the Senate economic affairs committee, said Grab should refund the estimated P1.8 billion in illegal fees it took from riders through a hidden metering system.

Grab explained that it did not gain from implementing the charge as 80 percent of it goes to the driver while 20 percent is used for driver incentives and passenger promos.

The LTFRB yesterday held a meeting with different TNCs to discuss issues facing the ride-sharing sector. 

“Part of the discussion here is to lay down before them the full disclosure, ’yung fare structure ng bawa’t isa (of each). Hindi puwedeng itago ng TNC ang (The TNCs cannot hide their) fare structure nila when they apply for accreditation,” Delgra said.

The LTFRB on Wednesday approved the accreditation of two new TNCs, Hype Transport Systems Inc. and HirNa Mobility Solutions Inc.

Hype chief operations officer Jen Silan said they are hoping to start operations late next month with a grand launch on May 26 but their application is ready.

Silan said they will start the pre-accreditation of drivers next week.

‘Refund or offer free rides’

Lawmakers yesterday urged Grab to refund the “illegal” P2 per minute fee it has been collecting from thousands of riders or to offer free rides.

“They should be told to return their illegal collections, which could amount to billions of pesos, to riders or to offer free rides without charging the cost to their partner-drivers,” Nograles said.

It was Nograles who exposed the P2 per minute fee Grab is charging on top of its flag down rate of P40 and P10 to P14 per kilometer depending on the type of vehicle used.

He said he would file syndicated estafa charges against Grab the moment it passes on the cost of refunds or free rides to its drivers.

Grab has admitted charging the fee since mid-2017 and that it did not have LTFRB’s approval, though the ride-sharing firm had informed an agency technical working group about it.

Quezon City Rep. Winston Castelo welcomed the board’s decision stopping the per-minute or travel time charge.

“In fact, the board should have suspended it on Tuesday, when it conducted its first hearing on the case. Chairman Delgra even expressed surprise when Grab representatives informed the board about such fee, telling the latter the agency has not approved it,” he said.

The board’s order, according to Castelo, should provide relief to riders who have started to complain about Grab’s increased fare rates.

Nograles estimated that at least P3 billion has been collected from the P2 per minute fee.

“It could be higher, but I am making a conservative estimate,” he said.

Castelo supported his colleague’s appeal for refunds.

He said the LTFRB should order Grab to reveal its data on the travel time fee, such as number of trips made and amount of collections. – With Jess Diaz