Grab PH to subsidize fares to ensure ‘decent driver earnings’

Grab Philippines rolled out on Monday a fare-subsidy scheme for TNVS drivers to make sure they still make a decent living after the R2 per minute component was suspended, the company announced.

“Based on our computations, a TNVS driver needs to make at least R330 per hour to be able to properly provide for his family’s needs and to cope with the traffic, high fuel and vehicle maintenance costs,” Brian Cu, Grab Philippines Country Head said.

“Since R2 per minute component was suspended, we received a lot of painful complaints from our partners that their earnings are not sufficient anymore to make a decent living. That’s why we decided to step in,” Cu added.

The ideal scenario for TNVS drivers is for them to earn at least R5.50 per minute or R330 per hour. This subsidy ensures drivers to get the ideal fare rate as computed by Grab’s system.

“For example, if a ride from Makati to BGC takes an hour because of heavy traffic despite short distance, and fare is computed at P120 only, Grab will return to the driver the P210 difference to make sure he made R330 for that one-hour trip,” Cu explained. Cu added, only riding hour with passengers will get subsidy.

Cu also clarified, subsidy is different from incentives. “Subsidy is better since you get the difference in fares on all “lugi” trips, while incentives can change from time to time and is only a bonus for drivers who hit a certain number of rides,” he said.

With this fare subsidy for drivers, Grab hopes that its TNVS partners will be more willing to take on more trips as demand doesn’t get any less.

There is an average of 600,000 bookings that increases to up to 800,000 during peak hours, while TNVS supply in Grab’s platform remains at 33,000.

“With guaranteed earnings, we hope that this subsidy will also urge our partners to be more confident that they will make money for any trip they get and continue providing quality service to the riding public,” Cu said.

Grab expects to spend over R100 million a month on this program but is committed to ensuring proper income for their drivers. “The subsidy will run as long as it’s needed and for as long as we have resources to do so,” he added.