What happened to Grab?

Grab, the Singapore-based ride-hailing company, was our savior when it came to Manila sometime in 2014. It was a commuter's dream, a respite from all the decrepit taxis plying the streets of Metro Manila.

Imagine getting a ride right from your doorstep in just a few minutes and with just a few clicks on your mobile phone.

No more riding dirty taxis that reek of alcohol, cigarette smoke and pungent air freshener. No more choosy cab drivers who turn down more passengers than they accommodate. No more exorbitant taxi fees.

I was among those who welcomed the arrival of Grab and its rival US-based Uber in the country, which also came to Manila around the same time.

The two ride hailing services were definitely heaven sent. Commuters – ignored oh so many times by discriminating taxi drivers – finally had a revenge of sorts.

There was even a time I did not want to drive anymore because there was either Grab or Uber anyway. It was so convenient. No more spending 30 minutes or so looking for a parking space, especially in urban jungles such as Makati or BGC.

Between the two, I liked Uber better because they offered cheaper rates – 10 or 20 percent cheaper than Grab.

I became a regular Uber user and would only book Grab if there was no other choice.

Fast forward to 2019

But nothing lasts forever as the cliche goes. Last year, Grab acquired Uber’s Southeast Asia operations, ending the heyday of Uber users – and drivers – in the Philippines and the rest of the region.

The Philippine Competition Commission (PCC), though considered by many businessmen as a thorn on their side, raised the red flags soon after.

“The PCC recognizes that the exit of Uber in the Philippines will put its rival Grab in virtual monopoly in the ride-sharing market until the new players come into operation,” said the PCC.

The country's anti-trust authority, headed by the esteemed economist Arsenio Balisacan, was right in giving out such warnings.

Monopoly

Today, as the PCC warned, Grab became the lone ride-hailing company in the Philippine market overnight and commuters are now feeling the pinch.

Last week, I tried booking a Grab from Katipunan Avenue near Ateneo de Manila to the University of the Philippines, Diliman, four kilometers away or just less than 10 minutes by car. Grab was charging me around P300 for that short ride. Imagine that. I cancelled and had to wait for 30 minutes for a regular taxi.

But this isn't about my Grab horror story. I asked friends and colleagues and they all shared the same observation – Grab, in the era of post-Uber, has become more expensive with its exorbitant fees.

A fellow journalist said that during the pre-Uber days, Grab only charged P70 for his regular ride from his home in Paco, Manila to the Department of Justice in Padre Faura. Now, he pays P120 for the same distance.

When he goes to his office in Mandaluyong, he would sometimes have to shell out P600 for the ride from his Paco home.

But it doesn't end here. Many commuters said Grab's service has deteriorated even as its fees have gone up. Driver cancellations are becoming a regular thing and navigation problems have become common.

And yet Grab has the audacity to charge more.

Greed

If this isn’t greed, I don't know what to call it. Commuters deserve better.

The PCC's decision to fine Grab P16.15 million for violating its price and service quality commitments is proof of the ride-hailing company's deteriorating services.

The commission’s order – released early this month – was based on an audit report submitted by Smith & Williamson, an independent monitoring trustee tasked to examine Grab’s compliance with its voluntary commitments on price, service quality and non-exclusivity for one year or until Aug. 10.

The PCC slapped P14.15 million for Grab’s "extraordinary deviation on its pricing commitment" and P2 million for exceeding driver cancellations at 7.76 percent instead of the committed five percent.

“With the merger of the country’s two biggest ride-hailing apps, Grab’s violations are indicative of its exercise of market power in the absence of a competitor of adequate scale in the market,” the PCC said in a statement.

Bravo PCC! May you continue to keep a close watch on monopolies to ensure that they don't abuse their positions in their respective markets.

Grab, in response, has committed to disburse the P14.15 million to the GrabPay wallets of passengers who took Grab rides from May 11 to Aug. 10.

It also maintained that its fares remain compliant with the fare matrix of the Land Transportation Franchising and Regulatory Board (LTFRB).

Market abuse

It’s time for authorities to allow other players to come in. Grab is clear proof of what can happen to consumers when a market is monopolized by just one company. 

The tendency to abuse the monopoly is endless. It’s just like Grab’s surging fares – the sky's the limit.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com