Congressman says Grab owes riding public ₱1.8 billion; Grab contests

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Highlights

  • Nograles: Grab did not inform LTFRB, public of P2 per minute fee
  • Grab maintains it was transparent with riders on additional fee
  • Grab: LTFRB was informed of additional fee in July 2017
  • Nograles: LTFRB is either complacent or participating in graft
  • LTFRB has yet to comment

Metro Manila (CNN Philippines, April 10) — Transport network company (TNC) Grab admitted to charging ₱2 per minute on its rides – but it maintained this fee was not illegal.

"Per minute charges remain part and parcel to Grab's fare structure today and we have continuously been transparent about this truth," Grab said in a statement on Wednesday.

It cited Department Order 2015-011, which provides that TNCs are allowed to set their own fares, subject to the oversight of the Land Transportation Franchising and Regulatory Board "in cases of abnormal disruptions of the market."

PBA Party-list Representative Jericho Nograles on Tuesday accused the company of amassing over a billion in these fees, unbeknownst to its customers.

"Grab is not allowed to charge P2 per minute... I have calculated that in the past five months, they owe a refund of ₱1.8 billion to the riding public," Nograles told CNN Philippines' The Source.

Nograles projected the ₱1.8 billion amount by multiplying ₱2 per minute with an average trip length of 30 minutes. This was multiplied to a reported 1.5 million trips per week for 20 weeks, which was when he first got wind of the issue.

The congressman showed a breakdown of his own ride in a Grab vehicle provided by one of the company's staff. It was dated February 2 and showed a charge of ₱2 for 27.5 minutes.

grab-fare-table_CNNPH.jpg  

He also showed a previous screen cap of Grab's fare table, which showed a claim that Grab did not charge per minute. The table can no longer be found on the Grab website.

Grab said it first deployed the ₱2 per minute fee upon review of its pricing structure in June 2017. It also said it consulted the LTFRB the following month.

"We corresponded with the LTFRB to present these changes and [were] given the opportunity to present in full our business model, supply and demand models and pricing structure during one of the Technical Working Group meetings in late July 2017," said Grab.

The company also insisted it has always been transparent about the amount.

"In fact, during times when questions were raised about fares in certain trips, we would always back compute and provide the basic formula... including the per minute charges," it said.

The transport network giant has just bought another company, Uber, prompting Nograles to raise concerns at how the allegedly unauthorized fees will grow as drivers and riders from the latter migrate to Grab. He pegged Uber's ridership at 1.3 million trips per week.

"To give you the repercussion of this... How will this balloon if it remains unmitigated? Uber will be absorbed by Grab," he said.

Grab's statement comes right after LTFRB had the company lower its fare surge.

LTFRB accountable?

Nograles also pointed a finger at the LTFRB, which he said was in charge of authorizing this fee and making sure the public was informed.

"Itong ₱2 per minute... alam ba iyan ng LTFRB o hindi? Kung hindi nila alam... then they are complacent. Kung alam nila, that's graft," said Nograles.

[Translation: This ₱2 per minute (charge)... does the LTFRB know about it, or not? If they don't... then they are complacent. If they do, that's graft.]

Grab maintains LTFRB was aware of the raise, but Nograles recounted transport officials were surprised when he mentioned it.

He said he raised his concern with the agency during Holy Week, but it was shrugged off.

"I did get to ask the LTFRB, and the LTFRB was saying, 'Really? Maybe you should talk to Grab.' I said I don't want to talk to Grab about this-I'm talking to the LTFRB," he said.

CNN Philippines also reached out to the LTFRB, but they have yet to respond.

Watch the full interview with Nograles here.