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MANILA, Philippines — Amid the holiday rush, the Land Transportation Franchising and Regulatory Board (LTFRB) said on Tuesday that it was considering reducing surge fees for Transport Network Vehicle Services (TNVS) by as much as 50 percent.
In an interview on Teleradyo Serbisyo, LTFRB Chair Teofilo Guadiz III said they have been receiving complaints about all-day and exorbitant surge charges, particularly that of Grab Philippines, the biggest among the country’s TNVS providers.
According to Guadiz, the LTFRB already summoned Grab to explain how it came up with its surge rates, which customers have described as excessively high. A surge fee is added to the base fare during peak hours or when demand is high but only a few drivers are available to encourage more of them to get out on the road.
READ: LTFRB issues special permits to PUVs for holiday rush
“Grab said its formula follows an algorithm [that] depends on demand and supply and traffic [volume along the route of the ride],” the LTFRB chief said.
Solution eyed
“We are questioning the formula of how they compute their surge fees. We are proposing to make it a uniform rate, or reduce the current surge fee by as much as 50 percent,” he added.
In September, Grab Philippines director for public affairs Booey Bonifacio explained that the all-day surge fees—even during nonpeak hours—were due to the high demand for TNVS.
“We are perpetually in a state of surge pricing because the current supply cannot keep up with the demand,” she said, noting that surge charges may be imposed even at predawn hours.
There are only around 40,000 TNVS units in the country. The LTFRB approved last week an additional 5,000 slots to address the expected hike in demand for the holidays.
The LTFRB is also seeking to reduce the base fare rate of Grab, which it claims has gone up to P80 without its permission.
“The board may issue a resolution before Christmas ordering Grab to lower their flag-down rate to P65. Their current flag-down rate [reaching up to P80] is too high,” Guadiz said.
Under the latest fare matrix approved by the LTFRB, the minimum fare for taxis and sedan-type TNVS is P45; P55 for AUV/SUV-type; and P35 for hatchbacks.
A network of digital advocates has also urged the LTFRB to impose strict rules regarding the surge pricing of TNVS.
According to Digital Pinoys national campaigner Ronald Gustilo, the perennial problem of sky-high fares during the holiday rush should be a thing of the past if only the LTFRB would impose strict rules on surge pricing.