LTFRB orders Grab to lower its price surges

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This story was updated to include a quote from PCC Commissioner Quimbo.

Metro Manila (CNN Philippines) — Grab is now barred from charging twice the normal fare like it has been doing before, according to transport regulators.

The Land Transportation Franchising and Regulatory Board (LTFRB)ordered the ride-hailing service to lower its fare surge limit from "times two" to "times 1.5."

Fare surges usually happen during peak hours or when the supply of  Transport Network Vehicle Service (TNVS) drivers is low.

LTFRB board member Aileen Lizada said the surge limit would take effect immediately and would stay in place until new Transport Network Companies begin operating.

Lizada said the board came up with the decision after receiving complaints from passengers who raised concerns over Grab's spiking fares in recent weeks, following its acquisition of Uber.

Grab said it welcomed the new regulation.

"Of course we respect the board's decision to further lower the cap of the surge. And we understand their justification for it. This is in fact a critical time and we believe that as soon as new players come in the board will perhaps study again the cap," Grab's spokesperson and policy head Leo Gonzales said.

Earlier, Grab Philippines Country Head Brian Cu said fears of unfair price surges were "unfounded" as the company has not changed its pricing policy in the past year.

The LTFRB previously set the "times two" surge limit in December 2016.

Uber halted

Transport regulators also ordered Uber to stop its operations as a ride-hailing company on April 16.

Uber has a pending petition to continue its operations filed before LTFRB last year.

During the hearing on Uber's petition, its lawyers told transport regulators they were supposed to cancel their petition because of the merger.

LTFRB's order to stop Uber's operations poses conflict with the Philippine Competition Commission's (PCC) ongoing review of the merger.

PCC Commissioner Stella Quimbo said they respected the decision made by the LTFRB.

"At this point the more important thing is the review. That we are able to actually finish this the soonest possible time. And that is not going to be affected," she said.

She added the agency will have a meeting Thursday to discuss the matter thoroughly and they would issue a statement after.

The PCC previously ordered Uber to extend its operations pending the agency's review of the buyout for the next six months.

The Commission is yet to issue a reaction on this.