Grab fined again for fare surge

THE Philippine Competition Commission (PCC) has imposed a fine of P16.15 million on Grab Philippines for violating its price and service quality commitments from May to August 2019.

Passengers who availed of Grab’s services between May 11 and August 10, 2019 may expect the rebate within 60 days through GrabPay credits, the PCC said in a statement.

The fine is the latest in a string of penalties imposed by the anti-trust body on Grab.

Grab was fined P11.3 million in the first quarter of its undertaking, P7.1 million in the second quarter, and P5.05 million in the third quarter.

For the fourth quarter, covering the period May to August, the PCC ordered Grab on Friday, December 13, to pay a total fine of P16.15 million, broken down as follows: P14.15 million for the "extraordinary deviation" from its pricing commitment and P2 million for exceeding driver cancellations at 7.76 percent instead of the committed 5.0 percent.

The fines imposed in the third and fourth quarters, which total P21.2 million, will be refunded to qualified passengers.

The PCC has been monitoring Grab's compliance to its voluntary commitments since it absorbed Uber, which exited the Philippines in April 2018.

Grab Holdings Inc. and MyTaxi.PH Inc. had acquired the assets of Uber B.V. and Uber Systems Inc. in the Philippines as well as in Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam.

Prior to releasing its order, the PCC received the audit report from Smith & Williamson, an independent monitoring trustee which was tasked to examine Grab’s compliance with its voluntary commitments on price, service quality, and non-exclusivity for one year or until August 10, 2019.

The PCC said each violation incurs an administrative penalty ranging from P50,000 to P2 million as provided by the Philippine Competition Act.

The commission stressed that the fines imposed on Grab will not be passed on to its drivers or riders.

“The ride-hailing market has seen profound changes in the past year as a result of Grab’s acquisition of Uber. With the commitments in place, PCC aims to maintain pre-transaction market conditions and will discipline any tendency to exercise monopolistic power with corresponding penalties,” PCC chairperson Arsenio M. Balisacan said in a statement.

Meanwhile, Balisacan said the commission is looking for other players that can "sufficiently compete" with Grab, which has dominated the ride-hailing market in the past year.

“More than a year after the Grab-Uber merger, the PCC instituted these measures to address the persistent impact of a virtual monopoly in this sector. The game-changer, however, will come in the form of a new player with strong financial muscle to enter the ride-hailing market and an environment that allows existing players to grow. Until then, the commitments stand for the benefit of the riding public,” Balisacan added. (MVI/SunStar Philippines)