LTFRB tells Grab to explain P85 minimum fare for short trips

The Land Transportation Franchising and Regulatory Board (LTFRB) has directed transport network company Grab Philippines to explain its alleged “price surge” and the P85 minimum base fare for short trips it charges, which is not yet authorized by the agency.

The agency has given Grab five days to submit data on the number of times they charged a minimum base fare of P85 for short trips.

Under the fare matrix approved by the LTFRB in September 2022, the minimum fare for a Sedan-type transport network vehicle service (TNVS) is P45; P55 for AUV/SUV-type TNVS; and P35 for hatchback-type TNVS.

The LTFRB, on Thursday, conducted the last hearing on the “surge pricing” issue.

“There will be no more hearing on this issue. We have already asked them to submit their position paper and that’s when we will come up with a decision,” LTFRB Chairman Teofilo Guadiz III said.

Guadiz said the decision will be issued by the LTFRB by the first week of February.

“What we intend to do now is to put up parameters... that only one entity can set the pricing. While it is true that the party has the mechanism, it is still the government that exercises regulatory functions and defines when they can impose an increase. What we would like to establish is at what time they can impose an increase and in what areas they can make the increase,” he said.

Sought for comment, Grab said it respects the LTFRB’s view on Grab's surge pricing mechanism.

“We believe that further regulating surge pricing beyond caps/existing regulation must be approached very carefully to protect and support all transport stakeholders, including the riding public," Grab said.

"We are one with the LTFRB in providing our commuters with a safe, reliable, and cost-effective means of transportation, and we will review this matter directly with our regulators," it added.

The company, however, maintained that its “dynamic pricing” is aligned with the pricing matrix set by the LTFRB for TNVS.

“It is a data-backed, algorithmic tool grounded on the level of demand versus supply. Surge pricing manifests when the volume of passengers booking a ride is much higher than the volume of driver-partners servicing it -- which is currently happening as there is a shortage of driver-partners on the road servicing the passengers booking a ride,” Grab said.

The algorithm, the company explained, is a key feature of its platform since its inception, describing it as a transport innovation that allows it “to offer reliable mobility options to passengers while ensuring that the fare benefits both consumers and our driver-partners.”

“We are one with the LTFRB in championing cost-effective transport for all Filipinos. As we look forward to the resolution of this case, Grab shall continue to work with all transport stakeholders to ensure our kababayans experience fair, convenient, and cost-effective public transport,” Grab said.

Last week, Grab said it experienced a shortage of driver partners on its platform due to a mobility standstill.

"Pandemic-induced challenges led to some driver partners losing their loaned cars to repossession or driver partners moving on to other economic opportunities elsewhere," it said.

The LTFRB is opening 4,433 TNVS slots, starting January 9.

Atty. Ariel Inton, president of the Lawyers for Commuters Safety and Protection Group, asked the LTFRB on why it could not limit the time of the surge rate to during the rush hours.

He said Grab app’s algorithm or system did not even pass through the LTFRB to comply with the set charges.

“Kasalanan ba ng mga pasahero kung wala yung mga TNVS dito?” said Inton, one of the petitioners.

“Pag yan hindi pasok sa fare matrix then that is overcharging,” he said.—NB, GMA Integrated News