Anti-trust body OKs Grab-Uber deal, with conditions

MANILA, Philippines — The Philippine Competition Commission (PCC) has cleared Grab’s acquisition of Uber, although this is still subject to compliance with the conditions set for service quality and pricing standards.

Grab Philippines assured regulators and the riding public that it would “act responsibly” and adhere to its voluntary commitments – including a vow to keep fares “within reasonable price range” – to address the anti-competition concerns raised by the PCC.

In a press conference yesterday, PCC chairman Arsenio Balisacan said the anti-trust body issued a commitment decision detailing what Grab needs to do to address issues on quality of service and price increases.

Under the commitment decision, Grab shall commit to bring back market averages for acceptance and cancellation rates to the time before it took over Uber last March 26.

To achieve fare transparency, Grab Philippines country head Brian Cu said his company would ensure the provision of trip receipts with clear fare breakdown per trip and make sure that fares are kept within a reasonable price range that is aligned with the approved Land Transportation Franchising and Regulatory Board (LTFRB) fare structure.

Balisacan said Grab will not be allowed to have an extraordinary deviation from the allowed minimum fares and warned that the company could be fined up to P2 million, or five percent of its commissions, every time it violates the conditions set in the voluntary commitments it signed last Thursday.

The PCC also set a threshold of 22 percentage points for the pricing and asked Grab to remove “destination masking” for drivers with low ride acceptance rate.

To improve quality of service, Grab promised to enhance driver performance standards; adopt a driver Code of Conduct and Welfare program, Passenger Code of Conduct and an emergency SOS feature help center and passenger no-show feature; establish a Grab Driver Academy; maintain dedicated service lines subject to prevailing labor regulations and implement a driver rewards program.

Balisacan said a third party would monitor the company’s compliance on a per quarter basis for at least one year.

“Grab will work with the PCC in appointing an independent monitoring trustee to monitor Grab’s compliance with the voluntary commitments. Grab will regularly submit monthly reports to PCC over the next 12 months,” Cu said.

His firm also committed to continuously uphold service quality, provide better ride experience and upgrade customer support.

“What will improve service quality drastically is if we are allowed to add cars. In the current regime, we may have a hard time doing that (improving service quality) where we are not allowed to add cars and charge per minute,” Cu said. “But while we await LTFRB to maximize the current supply cap, Grab also strives to improve driver acceptance rate, overall trip allocation rate and provide quick response to feedback.”

Grab also vowed to adhere to industry standards on non-exclusivity arrangements between transport network vehicle service (TNVS) providers and drivers and operators.

“We respect the rules and regulations set by LTFRB on the universality of the common supply base of registered TNVS. We honor our partners’ freedom to choose their preferred transport network companies (TNC) amongst the current players. Much as we respect the freedom of our partners to choose, we also believe that they should be empowered to decide for the future by joining the TNC they can work with best,” Cu said.

Grab’s current fleet size stands at 33,000 cars. It receives about 500,000 bookings daily.

PCC commissioner Stella Luz Quimbo said Grab could apply to be released from the commitments after six months, that is if the ride-share app is able to show there is sufficient competition in the market. – With Richmond Mercurio, Romina Cabrera