GRAB Country Head Brian Cu (L), GRAB Public Affairs Head Leo Emmanuel Gonzales during the Senate hearing on transport network vehicle services (TNVS). INQUIRER PHOTO/LYN RILLON
The accreditation of a fifth transport network company (TNC) by the Land Transportation Franchising and Regulatory Board (LTFRB) may be good news to those wary of Grab’s virtual monopoly of the ride-hailing service sector.
But a Grab official warned that allowing that many players without the government allowing more app-based vehicles to operate could actually spell more hassles than benefits for commuters.
Grab country head Brian Cu said only “two to three TNCs could survive” at the current cap of 66,750 set by the LTFRB. The number refers to the maximum number of vehicles that can use ride-hailing applications.
“If you have too many TNCs that the TNVS (transport network vehicle services) need to attach themselves to, that supply will spread out. It would result in more difficulties in booking a car,” Cu said in an interview on Wednesday.
Uneven densities
Because the cap fixes the number of app-based drivers on the road regardless of platform (Grab, Uber, for example), more TNCs would mean uneven “densities” of drivers as their networks thin out, he said.
“For example, if I book a car using Owto and it has 1,000 cars, it’s very unlikely that those cars are in a constricted area. Those cars would be all over Manila because that is where the demand would bring them. If the supply (of drivers) is spread out and the density is very low on a per TNC basis, people will find it harder to get a car.”
Cu’s remarks follow the LTFRB’s accreditation of Micab, a Cebu-based taxi hailing app, on Monday. Alongside Hype, Hirna, Go Lag and Owto, this fifth TNC is expected to challenge Grab’s dominance in the country since its acquisition of Uber’s Southeast Asia operations.
While stressing that he was not worried about Grab’s competitiveness in the market, Cu warned that the entry of several new players could actually cause an “overall network deficiency.”
“If the current cap is concentrated within two or three TNCs, that’s OK. But once you get to five or six, the concentration becomes fragmented,” he said.
Complaints vs Grab
Asked whether the regulatory agency would reopen discussions to adjust the cap for TNVS, LTFRB board member Aileen Lizada said they would first observe how the TNCs would be drawing from the current pool of available TNVS.
Grab has come under fire of late amid mounting complaints from passengers, mostly about canceled bookings and difficulty in booking cars. This prompted the TNC to impose sanctions on almost 500 drivers.
However, the company maintained that the root problem was the severe lack of app-based vehicles authorized to service passengers.
To explain the undersupply, Cu said Grab received at least 600,000 booking requests every day but had only 35,000 vehicles in its fleet to serve riders.
Of the 19,000 active Uber vehicles prior to the Grab acquisition, only 11,000 moved to Grab. At least 6,000 were not allowed to continue operating as TNVS as they were not part of the LTFRB’s masterlist, Cu said.
Cu said the company had appealed to the LTFRB to allow the 6,000 drivers to be absorbed by Grab. “With an average of 12 rides a day, this is already an additional 72,000 rides, which can help ease the plight of riders,” he said.