The Land Transportation and Franchising Regulatory Board (LTFRB) will review and monitor the fare setting system of Grab Philippines to determine any violation on its existing fare structure.
This was following the imposition by the Philippine Competition Commission (PCC) of a P23.45 -million fine on the ride-hailing company for overcharging its customers between February and May this year.
Ronaldo Corpus, LTFRB board member, said in a statement this fine has nothing to do with LTFRB’s fare structure but pertains to the failure of Grab to fulfill its commitment to PCC in its undertaking which it voluntarily submitted to the anti-trust body.
Nevertheless, the LTFRB deemed it best to conduct its study based on a memorandum circular (MC) issued in August.
“The agency shall therefore conduct a review to monitor Grab’s fare setting in order to determine any violation on the existing fare structure issued by the board,” Corpus said.
In MC 2019-036 on fare rates for transportation network vehicle services, LTFRB authorized transportation network companies (TNCs) to charge fare rate based on four components: flag down rate, fare per kilometer, fare per minute of travel and surge.
For sedan car, the flag down rate is up to P40, plus P15 per kilometer (km), and P2 per minute of travel.
For premium vehicles, the flag down rate is up to P50, additional P18 per km and P2 per minute of travel.
The rates for hatchback vehicles are cheaper, up to P30 flag down , P13 per km and P2 per minute of travel.
LTFRB’s memorandum allowed TNCs to charge up to two times surge in fare for the three types of vehicles.
“ Failure to observe the fare rates set above shall be penalized under the Joint Administrative Order No. 2014-001,” the LTFRB rules said.
In response, Grab said: “We respect and welcome the LTFRB’s intent to conduct a review to monitor our fare setting. Grab continues to work with our regulators, and we maintain our position that our fares remain to be compliant with the LTFRB’s fare matrix.”