Grab asked to set its service charge ‘as if Uber were still present’
The government’s antitrust body required Grab Philippines not to price its service significantly further from its pricing before it acquired Uber, among other conditions over a year-long period, top officials said.
The Philippine Competition Commission (PCC) has approved Grab’s voluntary commitments, which would bind the company from making the market anti-competitive, PCC commissioners said during a press briefing on Friday.
Changes in Grab’s operations should be expected at the end of the fourth quarter this year, according to PCC Commissioner Stella Alabastro Quimbo.
This marks the end of a 70-day negotiation between PCC and Grab Philippines, a series of extensive talks that convinced PCC to set aside the review of Grab’s takeover of Uber.
The review route could have led to a PCC decision to unwind the Grab-Uber deal, which has been flagged by antitrust bodies not only here in the Philippines, but in other countries in Southeast Asia as well.
“The situation, admittedly, is going to be tough on Grab. We imposed tough conditions,” said PCC Commissioner Johannes Benjamin Bernabe.
From August 10 onwards, Grab is required to fulfill these commitments, which cover the sensitive issues of pricing, acceptance and cancellation rates, and incentives, among others.
Top officials said Grab would be monitored quarterly for the next 12 months at most. A breach of any of these conditions could lead to a fine of P2 million per breach, “or even the unwinding of the transaction.”
Grab would nominate three independent firms to monitor the company’s performance, which would then be vetted by the PCC, said Commissioner Amabelle Asuncion.
PCC would make a recommendation should it not approve any of Grab’s nominations, according to Quimbo.
Officials said Grab was required to pay the fees for the monitoring firm with a cap of P12 million.
“I think it’s a careful balancing act between what we see as an imperative to protect consumers and to protect competition in the market vis-a-vis their business objectives,” Bernabe added.
‘As if Uber were still present’
Grab is allowed to be flexible with its pricing as per government regulation, as long as this does not result to an “extraordinary deviation” from the average rates back when Uber was still present, officials said.
Asuncion said, essentially, this means Grab’s fares should be at least similar, or the same as before. She said this would be “as if Uber [were] still present.”
“The idea, if I can simplify it, is whatever their prices prior to the merger where there was competition coming from Uber, we just want them to revert back to that situation,” she said.
The average prices differ per route, a factor that is considered in determining what counts as an extraordinary deviation, Quimbo said.
Grab is also required to revise its trip receipt, showing a breakdown of the fare, including distance, fare surges, discounts, and promo reductions.
It would also have to include the per-minute waiting charge in the receipt, assuming the Land Transportation Franchising and Regulatory Board reinstated this policy, PCC said in a separate statement.
Grab will also remove the “see destination” feature, while not introducing any policy or incentives that may result to drivers being exclusive to Grab.
Lastly, Grab will have an improvement plan, which will have the following measures: (1) enhance driver performance standards, (2) adopt a Driver Code of Conduct, (3) establish a Grab Driver Academy; (4) adopt an emergency SOS feature, help center, and passenger no-show feature; (5) adopt a Passenger Code of Conduct; (6) maintain dedicated service lines subject to prevailing labor regulations; (7) adopt a Driver Welfare Program; and (7) implement a Driver Rewards Program.
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