Grab users dismayed by measly refund

BOOKING A RIDE A commuter in Manila books a ride via the app of transport network company Grab, which has been ordered by the Philippine Competition Commission to refund customers after it was found to have overcharged its customers.—INQUIRER FILE PHOTO

When PJ, 23, heard news that ride-hailing giant Grab would be sending out refunds to its customers, he was elated.

In the past year, he had used the app almost every day. He estimates that he has spent thousands of pesos on the premium hailing service for a faster commute in Metro Manila.

But on New Year’s Eve, he was surprised to see a refund of only P27 split in three tranches: P15, P9 and P3.

“It was frustrating,” he said. “Obviously I had spent much more than what I got.”

He’s not the only one. Millions of Grab passengers on Tuesday had also received almost the same amount, as Grab rolled out the P19.4-million penalty imposed by the Philippine Competition Commission (PCC) for charging beyond the acceptable fare-in-range during two separate monitoring periods.

Each peso a user received stands for every P1,200 (for those who used the app in February-May) or P400 (May-August) he spent on the app.

PJ’s P27 rebate means he spent anywhere between P10,800 and P32,400 for the ride-hailing service.

Vulnerable to overcharging

Beyond that, however, Commuters of the Philippines founder Julius Dalay said the recent rebate rollout was symptomatic of the government’s lax regulation of transport network companies (TNCs) like Grab, leaving passengers vulnerable to overcharging fares.

While Grab maintains that it abides by the Land Transportation Franchising and Regulatory Board (LTFRB)’s fare matrix, the variables in the fare (P2-minute travel fee and surge rate) means it sometimes go beyond the acceptable fare-in-range set by the PCC.

“This is more a symptom of regulation not being strengthened,” Dalay said in an interview. “Both the LTFRB and the PCC need to coordinate and put in place a system where they can better monitor if Grab is overcharging its passengers.”

The LTFRB earlier launched an initial investigation into Grab’s alleged price-gouging practices and found that a large number of the complaints it filtered were not instances of overcharging, but the result of severe traffic doubling the time rate of the fare matrix.

A large part of this is the surge component, which is computed by adding time and distance and multiplying it to up to 2x. Grab uses an estimated travel time to compute its fares upfront, which could make other fares seem like “overcharging.”

The two sample fare breakdowns shown by the LTFRB to reporters illustrated as much. In one of the sample fares that cost P478, covering 12 kilometers under 49 minutes, Grab had “overcomputed” the distance rate at P187.80 (P12x15 should have been P180) and the time rate at P122 (P49x2 should have been P98), but had adjusted the surge rate by P181.

Another trip that cost P439, which took 43 minutes covering 10 km “undercomputed” its time rate: P62 (should have been P86). It then “overcomputed” its distance rate by P1.20.

It’s why the initial results are inconclusive, said LTFRB technical division chief Joel Bolanos. For the LTFRB to charge Grab of overcharging, it must have proof that the excess computations are systematic, not outliers.

Dalay added that there was also an issue with the way the rebates were rolled out. Passengers have no way of knowing if the rebates matched their actual expense.

No counterchecking

“The way that the rebates were computed is not transparent. There’s no counterchecking. While Grab can claim they have a system in place, people should still have the capacity to know how the rebates was obtained,” he said.

Moving forward, he also urged Grab and other TNCs to be more transparent with their fare breakdowns so commuters can verify for themselves if they are being overcharged.

“This is not only for the benefit of the passengers but also for them. So that when the time comes and regulators again question discrepancies, they can easily pinpoint where overcharging has taken place,” he said.