Angkas: Surge rates to curb ‘market distortions’

ANGkAS is compliant with the new rules for the motorcycle taxi program of the government, but will seek for the reimposition of the so-called dynamic pricing—otherwise known as the surge—to avoid a “market distortion.”

George Royeca, who owns 60 percent of the company, said his group removed on Wednesday the surge multiplier from its fares to comply with the new rules set for the pilot run.

however, he said dynamic pricing is essential to keep the market afloat, given the huge gap between the supply and demand.

“It has to make business sense. You can eliminate the surge if you eliminate the supply cap, or you can impose a cap, but you will need the surge to compensate. But if you impose a cap and remove the surge, you create market distortions that are unsustainable in the long run,” Royeca said in a news briefing.

he said the point of the surge is to encourage drivers to ply the roads to “augment the existing mass transit system.”

The surge for two-wheel vehicles, he said, is also different from that of four-wheel ride-hailing providers, such as Grab.

“The difference is the base for us is low. The actual quantum is not that big to other forms of transportation,” he said.

Angkas used to charge a 1.5x surge rate, or about P50 for a normal P100 ride. Grab charges a 2x surge rate.

Dynamic pricing is a common practice for app-based transport modes across the globe. The price for a ride is determined by different criteria, such as traffic situation, time of booking, demand, and others.

Under the new rules for the motorcycle taxi pilot program, platforms are not allowed to charge a surge rate.

Sans the surge rate, Royeca said, the gap between the market supply and demand will further widen.

Today, Angkas has about 27,000 bikers on its platform. however, only a maximum of 5,000 drivers hit the roads on a daily basis, as most of those in the platform are part-time riders.

With this, Royeca said his group will officially request the reimposition of the surge rate, and will formally present its position to the technical working group (TWG) for motorcycle taxis within the week.

“I believe the TWG is amendable to suggestions. This study can decide on which is more optimal to the passenger,” he said.

Angkas has petitioned against the new rules of the pilot program. It has questioned certain provisions, mainly the supply cap of 10,000 drivers per company, as it already has 27,000 bikers before the new rules were set.

The company won a stay order against the said provision, but it will lapse on Thursday.

Due to its persistence, Angkas also received a warning from the TWG that it risks being blacklisted from the motorcycle taxi program and its commercialization, should lawmakers decide to legalize the service.

Among the issues raised by the TWG is Angkas’s ownership structure, some safety issues, such as riders not wearing helmets, and its operations outside the pilot program’s area.

Royeca also said his group is not foreign-owned as he personally owns 60 percent of the company. The balance is unequally divided among five other investors.

he also said the claim that Angkas drivers were not wearing helmets is incorrect.

Royeca said his group’s operations in the two provinces down south—General Santos and Cagayan de Oro—were covered by local government laws. These services, however, were discontinued in respect to the TWG.

“Angkas has always exhausted all efforts to ensure that the path to regulation is met in the most efficient manner to ensure the safety of the commuting public,” he said.

Royeca added that Angkas will stay in the Philippines, even as it has met various opposition from different sectors of the government.

“I would like to reinforce on public record that we have always and will continue to work with government regulators and not against them. But on the same breath, we ask for fairness, in consideration of all the hard work we have done to comply with government regulators since last year,” he said.