Drivers start massive migration to Grab as Uber exits

FILE – A security guard stands at the entrance to the Grab office Monday, March 26, 2018, in Singapore. Grab, a fast growing Southeast Asian ridesharing, food delivery and financial services business, said Monday that Uber will take a 27.5 percent stake in it and a seat on its board as part of the deal. AP

Hundreds of Uber drivers flocked to the Megatent Events Venue in Quezon City on Wednesday – part of a massive migration effort that could involve as many as 24,000 people.

It was the second day of an “onboarding” session for Uber drivers in Manila after Singapore-based ridesharing giant Grab acquired the Southeast Asian operations of its main rival.

Should Grab Philippines succeed in luring all of Uber’s drivers, it would corner about 90 percent of Metro Manila’s ridesharing sector, capped at 65,000 units by the Land Transportation Franchising and Regulatory Board (LTFRB).

That prospect has consumers worrying about higher costs and poorer services, following the notion that fewer competitors provide fewer incentives for private enterprises to do better.

Standing beside a row of Japanese compact sedans and AUVs, ridesharing’s most popular car models here, Uber driver Patricia was indifferent to a business deal that had only served to disrupt her main source of income.

“I have no choice but to move. I borrowed money to buy my car and I need to pay it off,” she told the Inquirer.

In ridesharing, Patricia found a way to make money on her own terms by transporting passengers using Uber’s technology platform whenever she had the free time. In exchange, Uber takes a 25 percent cut.

Patricia was among dozens of drivers, some with their young children in tow, gathered outside the Megatent on Wednesday.

Near the entrance, a Grab staffer was reading out names from a so-called master list provided by the LTFRB. Only those people in the list would be allowed to move to Grab.

Uber will cease to operate in Southeast Asia by April 8 this year.

But Grab Philippines country head Brian Cu told reporters they would continue to process and accept Uber drivers even after that date.

“We will continue this until all Uber drivers on the master list of the LTFRB are activated on our platform,” Cu said.

The mood was lighter inside the air-conditioned Megatent, which could accommodate at least 1,000 people.

Migrating Uber drivers, welcomed inside as “Uberkads,” were seated while waiting to be called again to submit their requirements.

It was noontime and pastries from a local bakeshop chain were being distributed to the waiting drivers. In another part of the hall, Grab staffers were holding mini orientation sessions for their former rivals.

Inside, the Uberkads mused about the driver-friendly features of Grab, such as the ability to see a passenger’s destination before accepting a trip. This is not allowed by Uber.

Grab also offers better incentives, they said.

They noted that one drawback with Grab was that drivers would need to keep a minimum amount of money in its system to continue booking passengers. It is from this fund that Grab takes it commission.

According to Cu, services are also expected to improve. He noted that when there were two big operators, drivers simply switched networks when penalized for bad behavior, such as frequently canceling rides.

“Now, there is a bit more weight to following the rules,” Cu said.

He added that the enlarged network of Grab would help control prices, given the supply-demand algorithms utilized by the ridesharing sector, and improved waiting times.

LTFRB board member Aileen Lizada said in a press conference Wednesday that fare hikes would also be strictly regulated.

Moreover, new competition is on the way with local companies Lag Go, Owto and Hype each seeking to operate as a transport network company, the formal category for businesses like Uber and Grab.

“So if you say there is no competition, soon there will be,” Lizada said.

Later addressing the drivers on queue, Lizada urged them to follow regulations, ridesharing being a public service.

“Let us start on the proper footing,” she said.

Getting started is the most important issue for Rex Restauro, who has been an Uber driver for eight months. Restauro, who owns a computer shop, uses ridesharing to make extra income in the evening.

He said he has no qualms about switching to Grab.

“I’m in this industry anyway so it’s a waste to stop it now. Even if you have a day job, you can make money here,” he said. /atm