Lawmaker: Grab charges 'illegal' fares, owes customers refund

MANILA, Philippines – A lawmaker on Tuesday, April 10, accused Grab Philippines of "illegally" charging its consumers and said the ride-hailing service should refund its customers P1.8 billion for the last 5 months alone.

In an interview with CNN Philippines, PBA Representative Jericho Nograles accused Grab of illegally charging P2 per minute for their rides, on top of its flagdown rate of P40 and charging P10 to P14 per kilometer.

"Grab charges P2 per minute illegally. They're not allowed to charge P2 per minute. The LTFRB has not allowed them to charge P2 per minute but they have charged P2 per minute to everyone," Nograles said.

The lawmaker said that based on his calculation, the illegal charges of Grab amounted to P1.8 billion.

"I have calculated that in the past 5 months, they owe P1.8 billion to the riding public," Nograles said.

Nograles told Rappler in a phone interview on Tuesday that he arrived at the figure based on the conservative estimate of P1.5 million Grab rides per week, multiplied by the average travel duration of 30 minutes, at a P2-per-minute charge, over 5 months. He said he set his calculation for that period because he only had personal knowledge about the alleged illegal charge 5 months ago. 

When Grab Philippines launched its ride-hailing services in 2015, it charged a base fare of P30 and additional P12 per kilometer. There was supposed to be no additional charges per minute.

In December 2016, the Land Transportation Franchising and Regulatory Board (LTFRB) ordered a cap on ride-hailing services fares, with Grab maintaining its base fare of P30 and lowering its per kilometer charging to a P10 to P14 range depending on surge pricing.

Nograles said that as of 2017, the P2-per-minute charge was "not approved" by the LTFRB.

The lawmaker said that when he asked the LTFRB about the pricing, he was told: "Really? Maybe you should talk to Grab."

"Alam ba 'yan ng LTFRB o hindi? Kung hindi nila alam, complacency 'yan. If alam nila, graft 'yan (Does the LTFRB know about this? If they don't, then that's complacency. If they do, it's graft)," Nograles added.

Rappler sought a comment from LTFRB board member Aileen Lizada on Nograles' allegation, but she has not yet replied as of posting.

Grab repeatedly said in the past that fares will remain as is as it "cannot unilaterally" increase the fares.

Although fares right now may not increase given its acquisition of Uber, Grab Philippines earlier submitted a petition before the LTFRB to increase fares due to the tax reform law.

What does LTFRB know?

Does LTFRB know about the P2-per-minute charge? LTFRB and Grab have different answers.

As far as LTFRB Chairman Martin Delgra knows, "Grab doesn’t charge per travel time."

Delgra said this in an interview on radio dzRh on Sunday, April 8, when asked about the difference in the fares charged by Grab and Uber. 

"Medyo mataas 'yung Grab kasi nag-o-offer yung Uber ng, aside from the base fare na parehas sila P40 each, 'yung per [kilometer] nila mas mababa 'yung Uber eh, P5.70 per [kilometer] . Pero 'yung Grab P11 to P14 per [kilometer], pero wala sila 'yung travel time. 'Yung Uber naman meron sila travel time, P2 per minute," he said on Sunday. 

(Grab fares are more expensive than Uber because aside from having the same base fare of P40 each, Uber’s per kilometer charge is cheaper than Grab at P5.70 per kilometer. Grab charges P11 to P14 per kilometer but they don’t have travel time [charges]. Meanwhile, Uber charges travel time at P2 per minute.)

Asked about its P2-per-minute charge, Grab Philippines head Brian Cu told Rappler in an interview on Monday, April 9, "LTFRB is aware."

Grab spokesman Leo Gonzales, who was with Cu during the brief Rappler interview, said, "There was a time that we informed LTFRB about this."

Asked whether the LTFRB held a hearing on the additional charge, Cu said, "No hearing because at that time, it (fare) wasn’t regulated yet at the start."

"The first TNC accreditation doesn't say that pricing will be regulated. It's already in the new ones," he added.

Uber announced on March 26 that it sold its operations in Southeast Asia to Grab. In turn, Uber will receive a 27.5% stake in the business. (READ: Philippines' privacy watchdog summons Grab after deal with Uber)

The Philippine Competition Commission had ordered Uber and Grab to operate separately beyond April 8, the date when Uber was supposed to transition its operations to Grab.

The LTFRB earlier said it would rather that "Uber to close down" by April 8, citing lack of manpower on Uber's backend to handle customer services.

Grab Philippines also said operations of the two ride-hailing companies can no longer be separate, as required by PCC for the duration of its review of the deal, as they are currently funding the operations of Uber since the acquisition.

The acquisition left thousands of commuters with only Grab as their choice for ride-hailing apps. – Rappler.com

Aika Rey

Aika Rey covers the Philippine Senate for Rappler. Before writing about politicians, she covered budget, labor, and transportation issues.

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