Stopping short of canceling Grab’s franchise for repeatedly overstepping its authority, the Land Transportation Franchising and Regulatory Board (LTFRB) imposed a P10-million fine on the ride-hailing company for overcharging its passengers when it imposed a P2-per-minute travel charge without prior approval.
The order signed on July 9 and released to the media on Tuesday afternoon resolved a three month-long debate on whether the transport network company (TNC) could unilaterally set its own rates under the now-rescinded Department Order (DO) No. 2015-011.
The LTFRB also directed Grab to reimburse riders who were charged the travel fee between June 5, 2017 and April 19 this year by offering them rebates for future rides.
Refund valid for 20 days
The refunds will be valid for 20 days from the date the agency’s decision becomes final pending an appeal from Grab or from the time the TNC starts the reimbursement process.
The LTFRB also stressed that Grab alone should shoulder the penalties with its driver-partners to be spared of any liability since it was the TNC that made the decision to impose the additional rate.
The agency first started looking into Grab’s alleged illegal imposition of the additional fee in April after it was exposed by PBA partylist Rep. Jericho Nograles.
In its July 9 order, the LTFRB criticized Grab for invoking the DO which allowed TNCs to set their own fare matrices subject to LTFRB oversight, describing it as an “unauthorized delegation of legislative authority.”
The LTFRB said it was the only one which could “determine, prescribe and fix fates” under Executive Order No. 202 and Commonwealth Act No. 146 which both overrode the DO.
“It was clearly shown that such imposition (was) invalid and without authority from the board, for which (Grab) must suffer the consequences,” it added.
It noted that Grab generated “hundreds of millions of pesos” from its riders when it began charging the fee in June 2017, making a case for overcharging under Joint Administrative Order No. 2014-1.
Whopper of a fine
Computing the penalty (P5,000) for each count of overcharging, however, would bring the penalty to trillions of pesos—a fine the LTFRB said it was not inclined to impose on the TNC to keep its driver-partners afloat and avoid inconveniencing hundreds of thousands of commuters.
This was also the reason why Grab’s franchise was not canceled even though the violation merited it, it added.
This was not the first time Grab was fined for allegedly flouting LTFRB rules. On July 11, 2017, it paid P5 million for operating colorum transport network vehicle services.
LTFRB Board Member Aileen Lizada was the sole dissenter among the agency’s officials. The order was signed by LTFRB Chair Martin Delgra III and Board Member Ronaldo Corpus.
This marked the second time she did not sign a major LTFRB ruling upon release this month, the other being the P1 provisional fare increase for jeepneys in Metro Manila, Calabarzon and Central Luzon.
Grab spokesperson, Leo Gonzales, said they were “reserving comment for now until we have fully studied and analyzed the matter with our legal team.” It has 15 days to file a motion for reconsideration.