LTFRB’s Delgra grills Grab over unapproved base fares

Land Transportation Franchising and Regulatory Board (LTFRB) chairman Martin Delgra III grilled transport network company Grab Philippines (MyTaxi.PH Inc.) for supposedly imposing minimum fares without prior regulatory approval.

LTFRB questions when Grab began charging P125 for their premium services; Grab said the fare was imposed the same time as the P2 travel time charge on June 5, 2017. pic.twitter.com/44aoEHLyKs

— Rie Takumi (@rie_takumi) May 29, 2018

Grab was questioned about the fees during a board hearing Tuesday on the TNC’s petition for a fare increase and the introduction of new services.

PBA Representative Jericho Nograles has claimed that Grab imposed an P80 minimum fare for standard four-seater rides without authorization from the LTFRB.

Delgra’s inquiry delved into the services of Grab Premium after it was revealed that it also charges a minimum fare of P125.

“Obviously [we were] not [informed] insofar as the computation of the minimum fare is concerned. Kaya nga nalito kami dun sa minimum fare compared to the base fare and in relation to the other factors to determine the fare,” he said after the hearing.

Anton Bautista, Grab Philippines’ Strategy and Special Projects head, explained during the hearing that riders are charged either P80 or P125 only if their respective destinations are less than 3 kilometers.

The minimum charge is imposed to ensure that drivers are still “well-compensated” for any trip even if the distance merely 1 kilometer, according to the Grab official.

The base fares were imposed on June 5, 2017, the same date Grab inserted into their fare computation a P2 travel time charge that the board suspended on April 19, 2018.

For the regular car services, Grab gave the following formula:

• P40 base fare

• P10 to P14 per km

• P2 per minute travel charge (currently suspended)

• x2 surge charge

The formula for the premium service is as follows:

• P70 base fare

• P16 to P23 per km

• P2 per minute travel charge (currently suspended)

• x2 surge charge

“The way we understood it earlier, internally-generated by the system. Ngayon lang natin naintindihan na merong distinction between the minimum at yung tinatawag na base fare,” Delgra said.

Leo Gonzales, Grab public affairs head, insisted after the hearing that the P80 and P125 base fares have always been indicated in the fare matrix and have never been hidden from riders.

“At the end of the day, what you see on the app—and 600,000 people attempt to book and pay that amount every day. That is an upfront pay which includes, if it is the minimum distance, the minimum fare,” he said.

“We’ve never tried to hide anything from the general public, we’ve been upfront with our fares,” Gonzales noted.

The LTFRB ordered Grab to revise its fare hike petition, including the computations for the current and proposed services, within 10 days from May 29.

Delgra noted the LTFRB observed the details of the fare structure proposed by MyTaxi.PH, and as stated in the fare increase petition, was not explained well.

“Ipapa-klaro lang kasi ang sinusunod naman natin dito ‘yung batayan doon sa apat na elemento ng pagdedetermina ng pamasahe,” Delgra said.

“Whatever be the case, kung anuman ‘yung mga amounts arrived at on those four elements, based on their system, they would be able to determine there what they call minimum fare, which is not mentioned in any of their pleadings,” he said.

Leo Gonzales, Grab public affairs head, insisted after the hearing that the P80 and P125 base fares have always been indicated in the fare matrix and have never been hidden from riders.

The LTFRB ordered Grab to revise their petition for the fare hike, including their computations for their current and proposed services, within 10 days from May 29.

Delgra noted the LTFRB observed the details of the fare structure proposed by MyTaxi.PH and stated in the fare increase petition was not explained well.

Algorithm in foreign hands

Nograles questioned Grab’s representatives about the ownership of the algorithm that determines the fares of their customers.

“Does that mean that foreigners are regulating Grab and not the LTFRB?” he asked.

Bautista said that Grab Philippines had no direct access to the algorithm.

“Unfortunately, neither I nor anyone in the country has the level of access to [the] algorithm. It’s the system. We don’t have direct access to [it],” he said.

Delgra noted the LTFRB needs to know how the algorithm works and Grab responded by offering to present it to the board in a closed meeting.

“Nakapagtataka yan. Ibig sabihin ‘yung system pala nila hindi nakabase sa Pilipinas,” Delgra said. “We need to understand how the algorithm works because that’s the only way to be able to understand more clearly how these fares are being computed and disclosed to the public.”

The next hearing was set at 9 a.m. on June 26, 2018 at the LTFRB.

Filed on Friday, Grab’s petition argued that the April 19 order suspending the travel charge was “contrary to law and applicable jurisprudence” as it infringed upon the equal protection clause guaranteed by the Constitution.

“Unwarranted benefits, advantage and preference to the other transportation network companies” have also been given to operators and drivers switching to other TNCs as they have not been hit by the suspension of the travel charge.

The LTFRB suspended Grab’s travel charge while investigating Nograles’ claims that the P2 per minute charge, among other “illegal” charges, was not sanctioned by the board. —VDS, GMA News