LTFRB orders Grab to explain unauthorized fares

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This story has been updated to include a statement from Grab.

Metro Manila (CNN Philippines, April 12) — The Land Transportation Franchising and Regulatory Board (LTFRB) gave ride-hailing company Grab five days to explain why it had been charging  its customers unauthorized fares.

In a show-cause order dated April 11, the agency asked Grab to give a reply in writing why its accreditation as a transportation network company (TNC) should not be suspended or cancelled as a result of this move.

Grab was also ordered to appear in a hearing on the case on Tuesday, April 17.

The order came a day after PBA Party-list Representative Jericho Nograles revealed on CNN Philippines' The Source that Grab was charging its passengers an unauthorized ₱2.00 per minute of travel time. He estimated that the company had collected some ₱1.8 billion from these fees over the past five months.

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

However, Grab maintained the LTFRB had known about the extra charge. The company said it notified the Office of the LTFRB chairman, and it was "received and acknowledged" in June 2017, when the scheme was first implemented. It was discussed again at a technical working group meeting in late July.

Grab again cited Department Order 2015-011, which provides that TNCs are allowed to set their own fares, subject to LTFRB oversight "in cases of abnormal disruptions of the market."

Leo Gonzales, Grab Philippines Public Affairs head, told CNN Philippines' Balitaan the fare change "did not need the LTFRB approval." However, the board was free to contest this.

"In all our meetings with the LTFRB wherein we discussed the fare in the presence of the board, wala silang reklamo [They did not complain]," said Gonzales.

He admitted, however, that Grab's website might not have reflected the fare change right away. He added the extra charge did not go to Grab, but to the drivers.

Nograles earlier told The Source transport officials should be held accountable.

"Itong ₱2.00 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 ₱2.00 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.]

The lawmaker also disclosed that the LTFRB had earlier shrugged off his concern.

"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," Nograles said.

The show-cause order is another hurdle for Grab, which just recently acquired another TNC, Uber.  The deal would give Grab a monopoly of the market, although the company has been ordered by the LTFRB to lower its surge fares.