Grab told only gov’t can fix fares

Amid the squabble on Grab Philippine’s pricing scheme, the Land Transportation Franchising and Regulatory Board on Thursday reiterated that only the government can exercise regulatory functions to impose pricing arrangements on local transportation.

“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,” LTFRB Chairman Teofilo Guadiz III said during a hearing on Thursday.

He also pointed out that setting off “surge” prices should not be dependent on one company alone or supply and demand.

“What we would like to establish is what time they can impose an increase and in what areas they can make the increase,” Guadiz explained.

Guadiz also gave Grab Philippines an ultimatum — five days to submit data on the number of times they charged a minimum base fare of P85 for short trips.

He said the Board will decide by early February if Grab Philippine’s pricing schemes for drivers and commuters are allowable.

“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,” Guadiz said.

The board en banc instructed Grab Philippines to explain and show all documents on how they charge fees for certain ride distances that are often pegged at P85.

It wanted to see how Grab arrived at this fare rate and asked the company to present their computation on “surge” fees.

In a separate statement on Thursday, Grab Philippine said it will directly review its pricing schemes with regulators to provide commuters with “a safe, reliable, and cost-effective means of transportation.”

“We respect the LTFRB’s view on the Grab 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 Philippines said.

Grab Philippines executives were scheduled to attend a hearing at the LTFRB last 13 December 2022 but failed to do so after they were in close contact with someone who tested positive for COVID-19.

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.