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As the Philippine Competition Commission (PCC) marked its first year of monitoring Grab Philippines, they again slapped another P16.15 million fine to the ride-hailing firm for violating its price and service quality commitments during the fourth quarter of the initial undertaking.

PCC said the fine is the latest in a string of penalties faced by Grab for violating its commitments.

“For the fourth leg of the initial undertaking, PCC imposes a fine P14.15 million for Grab’s extraordinary deviation on its pricing commitment, and P2 million for exceeding driver cancellations at 7.76 percent instead of the committed five percent,” PCC said in a statement.

Last November 18, PCC imposed a total fine of P23.45 million on Grab for breaching its pricing commitments during the first to third quarters of the initial undertakings.

“Each violation incurs an administrative penalty ranging from P50,000 to P2 million as provided by the Philippine Competition Act. With the merger of the country’s two biggest ride-hailing apps, Grab’s violations are indicative of its exercise of market power in the absence of a competitor of adequate scale in the market,” it said.

Fines for the third and fourth quarters will be refunded to qualified Grab riders.

PCC said passengers who availed of Grab’s service between May 11 to August 10 this year, or the fourth quarter of the initial undertaking, shall expect the rebate within 60 days through GrabPay credits.

“PCC underscores that the disgorged amount shall be paid by Grab and shall not be passed on to its drivers or riders,” it said.

In a statement, Grab Philippines said it respects the findings of the Philippine Competition Commission on its May 11 - August 10, 2019 monitoring.

“TNVS is initially intended to augment the mass transportation system in the country, at the current rate, the TNVS is now carrying the heavy load of serving commuters which the current mass transport system is unable to accommodate,” Grab said.

Grab said it will be disbursing the total computed administrative penalty of P14,150,000 to the GrabPay Wallets of those passengers who took Grab rides from May 11 to August 10, 2019 in compliance to the order of the PCC.

The disbursement will happen no later than February 10, 2020, with a corresponding communication to the relevant passengers five days prior to the disbursement.

The PCC also clarified Grab’s pricing commitment is separate and independent from the fare structure of the Land Transportation Franchising and Regulatory Board (LTFRB).

“While LTFRB has imposed a fare matrix for all transport network vehicle services, the PCC binds Grab to its voluntary commitments, including keeping its fares within a range as if a competitor like Uber were present in the market,” PCC said.

PCC fines Grab for fares that deviated from its pricing commitments to the Commission, even if the same is not considered overcharging based on the fare matrix imposed by LTFRB.

As the initial undertaking lapsed, PCC found that there remains insufficient competition in the ride-hailing market.

On October 31, Grab signed a new set of voluntary commitments as a continuing condition for the anti-trust authority’s clearance of Grab’s acquisition of Uber in the Philippines in 2018.

“More than a year after the Grab-Uber merger, the PCC instituted these measures to address the persistent impact of a virtual monopoly in this sector. The game-changer, however, will come in the form of a new player with strong financial muscle to enter the ride-hailing market and an environment that allows existing players to grow. Until then, the commitments stand for the benefit of the riding public,” PCC Chair Arsenio Balisacan said.

“The ride-hailing market has seen profound changes in the past year as a result of Grab’s acquisition of Uber. With the commitments in place, PCC aims to maintain pre-transaction market conditions and will discipline any tendency to exercise monopolistic power with corresponding penalties,” Balisacan added. Ella Dionisio/DMS