Singaporean ride-hailing app Grab seems to be an entitled service provider in the Philippines.
The Land Transportation and Franchising Regulatory Board (LTFRB) is clearing the way for Grab Philippines to obtain 100,000 more slots in tranches for its four-wheeled vehicles (or transport network vehicle service)—a move that will surely raise eyebrows in the sector. LTFRB chairman Teofilo Guadiz III reasoned out that Grab’s additional and future franchises would help create 500,000 new jobs as part of an investment deal with the government.
But allocating more franchises to Grab is tantamount to promoting unfair competition in the TNVS taxi business. It would make more sense if the LTFRB opted to open the market to new players instead, given the complaints of overcharging and abuse lodged against Grab.
A group this early criticized the decision of the LTFRB to grant 100,000 TNVS slots to Grab. Digital Pinoys national campaigner Ronald Gustilo called the LTFRB decision an abuse of dominance and could lead to outright monopoly. He urged the government to help other transport network companies that can fill the gap in demand instead of granting the slots to just one company.
“Why is LTFRB giving Grab special treatment when it is taking them too long to decide on complaints against the overpricing and surge pricing abuse? LTFRB should first decide on the pending complaints before handing out new franchises. It seems that they are tolerating this kind of practice,” says Gustilo.
The decision of the LTFRB may also pave the way for more slots in the app-based motorcycle-taxi hailing service. I am not sure, though, if the LTFRB has the jurisdiction to grant franchises to the motorcycle taxi business. The regulator is part of the Department of Transportation’s Technical Working Group (DOTr-TWG), along with the Land Transportation Office (LTO) and some members of the Senate and Congress.
The TWG was formed to oversee the government’s motorcycle taxi pilot program in aid of legislation. Three motorcycle taxi companies are part of it—Angkas, Joyride and Move It. The program aims to create and develop a comprehensive motorcycle taxi law that will benefit both riders and commuters.
Can Guadiz grant franchises to MC taxis when the program is still in its testing stage? Granting MC taxi franchises to Grab in itself is contentious. For the sake of argument, those MC taxi franchises should be given to Move It, and not Grab
To recall, Grab recently acquired 99 percent of Move It’s business operations. Both Grab and Move It, in all of their media interviews, said the merger would not affect Move It’s business operations because Move It remained independent from Grab.
Move It, says general manager Wayne Jacinto in an interview with DZMM on September 13, 2022, will remain as Move It regardless of the investments and shares bought by Grab.
Grab Philippines country head Grace Vera Cruz echoed Jacinto’s statement in a CNN interview on September 15, 2022. “Move It exists as a separate entity and Move It has the license for the pilot or the accreditation for the pilot. It doesn’t automatically mean that Grab is going to participate in the pilot through Grab as the shareholder. What it means is Grab is a shareholder of Move It and Move It continues to be the participant in the motorcycle taxi pilot,” says Cruz.
Meanwhile, complaints against the backdoor entry of Grab into the MC taxi pilot study through its acquisition of Move It remains unresolved.
Lawmakers, thus, should pass the motorcycle taxi law now to serve as basis for rules and regulations of the industry. The legislation will foster competition and lead to better services for the riding public.
Grab’s growing dominance, meanwhile should be checked. The Philippine Competition Commission has complained during a recent congressional hearing that Grab continued its fare increases despite the fines it received for overcharging.
Marikina 2nd district Rep. Stella Quimbo reminded the PCC during the same hearing that it had the power to investigate Grab Philippines about its abuse of dominance.
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