SURGE pricing, which is being practiced by the ridesharing service Uber but is now being questioned by a transport group, will soon be applied to premium taxis as well.
READ: Legal questions ain’t over for Uber
According to the head of the Land Transportation Franchising and Regulatory Board (LTFRB), the agency will allow premium taxis—a newly created category of vehicles for hire—to increase their fare during rush hour under a scheme similar to one used in Singapore.
“We will implement that first on premium taxis. Let us see what the market reaction will be,” LTFRB Chair Winston Ginez told reporters on Friday.
Premium taxis are a new, high-end class of transport service created by the Department of Transportation and Communications. It was one of the four new categories listed under DOTC Order 2015-011 that was issued in May, along with transportation network companies or TNCs (like Uber, GrabCar), bus rapid transit and airport buses.
Unlike regular taxis, premium taxis must have a 2000cc engine displacement or its electrical or hybrid equivalent, a global positioning system, an online or app-based booking facility, and an onboard electronic payment device for credit or debit cards, among other requirements.
Premium taxi operators must have a minimum of 25 vehicles per fleet, all of which must be brand new at the time of the franchise application. To date, however, the LTFRB has yet to issue guidelines for applicants.
READ: Uber, GrabCar vow to comply; LTFRB explains Premium Taxi
Ginez held a meeting on Friday with Uber and GrabCar regarding complaints about their jacked-up fares and “picky” drivers, as observed on the night of Sept 8. when flash floods paralyzed traffic in many parts of Metro Manila. The LTFRB chair himself noted that Uber fares went up five times the usual rate that night.
He made mention of premium taxis when asked by reporters about the possibility that regular taxis would demand that they, too, be allowed to engage in surge pricing.
“In Singapore, there’s an automatic 25-percent surcharge on the taxi meter during rush hour. We will include that in the memorandum circular that we will issue on premium taxis,” Ginez said.
Ginez disclosed the plan even after the LTFRB received a petition from the party-list group
1-Utak questioning Uber’s price surges. The petition asked why TNCs were given the authority to set its own fares whereas other public utility vehicles can’t just do that without government approval.
An Uber representative at Friday’s meeting explained that the fares charged by its partner vehicles are “algorithmically dictated by the system based on demand.’’