Pricing abuses earn Grab hefty fine

The fine will be refunded to qualified Grab riders. Those who availed Grab’s service between 11 May and 10 August this year will get the rebate within 60 days via GrabPay credits.

To moderate its greed until the end of December was what Representative Jericho Nograles asked of Grab for Christmas.

Qualified riders are expected to get a refund as the Philippine Competition Commission (PCC) on Wednesday imposed a P16.15 million fine on Grab Philippines Inc. for violating price and service quality commitments over a four-month period this year.

The competition watchdog said this marks the completion of the first year it monitors Grab on its voluntary commitments. The fine is also the latest in a series of penalties imposed on Grab for the same reason.

The P16.15 million fine, the fourth leg of the initial undertaking, is composed of a P14.15 million fine for Grab’s “extraordinary deviation on its pricing commitment,” PCC said, as well as a P2 million fine for exceeding driver cancellations at 7.76 percent instead of five percent as committed.

Grab earlier on had been fined P11.3 million for violating pricing commitments in the first quarter, another P7.1 million in the second quarter and P5.05 million in the third quarter.

The fine will be refunded to qualified Grab riders. Those who availed Grab’s service between 11 May and 10 August this year will get the rebate within 60 days via GrabPay credits, PCC said.

PCC noted that the amount will be paid by Grab and will not be passed on to drivers and 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 chairman Arsenio Balisacan said in a statement.

PCC and Grab inked voluntary commitments in August 2018 in line with the latter’s acquisition of its only competitor at the time, Uber. The two signed another set of commitments in October as a continuing condition for acquisition, as the PCC found “that there remains insufficient competition in the ride-hailing market.”

The commitments are different from the fare structure by the Land Transportation Franchising and Regulatory Board for transport network vehicle services.

“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,” Balisacan said.

“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,” he added.

At the House of Representatives, a legislator appealed to ride-sharing company Grab Philippines to reduce their supposed excessive commission to five percent as he noted that drivers can hardly get enough trips due to the holiday traffic rush.

“I appeal to Grab to please reduce their commission to five percent even just during the Christmas season,” Rep. Jericho Nograles said in a statement.

According to Nograles, the amount of commissions Grab gets from its drivers is excessive.

“The price surge that Grab has been imposing is just too much and the traffic is just unbearable.”

“Even just until the end of December, please moderate your greed,” he said.

Nograles’ recent appeal came after the PCC slapped Grab with a new fine of P16.15 million for charging its customers “extraordinary” fares from May to August.

Last month, the PCC ordered Grab to pay a penalty of P23.45 million for violating its pricing commitments.