Competition Law & Anti-Trust

PCC gives Nod to Grab-Uber Deal

Date: 10 August 2018; Type: Legal News; Source: Philippine News Agency

MANILA, Aug 10 (PNA) - The Philippine Competition Commission (PCC) Chairman Arsenio Balisacan announced Friday the antitrust body has given the green light to go ahead with the acquisition deal between transport network companies (TNCs) Grab and Uber.

This is after the PCC has finally approved the voluntary commitments submitted by Grab to the Commission.

Balisacan said even with the approval of the deal, Grab will be subjected to monitoring for a minimum of six months.

Among the voluntary commitments that have to be met by the TNC include improving the quality of its service by bringing back market averages for acceptance and cancellation rates before the merger happened, and its response time to rider complaints.

Grab fares shall not have an “extraordinary deviation” from the minimum allowed fares, which are set by the Land Transportation Franchising and Regulatory Board.

PCC Commissioner Stella Luz Quimbo mentioned that the “extraordinary deviation” should not be above 22 percentage points of the fare before the acquisition.

PCC Commissioner Amabelle Asuncion, meantime, explained that this commitment to eliminate the “extraordinary deviation” on Grab fares aims to revert prices of ride within the pre-transaction level.

According to Asuncion, if a Grab ride fare cost PHP100 before it acquired Uber surged to PHP180 for the same route after the transaction, prices should go back to more or less PHP100 or only up to PHP120.

Grab likewise pledges for transparency by giving a fare breakdown per trip in its receipt that shall include distance, fare surges, discounts, promo reduction, and per-minute waiting charge.

The TNC will also remove the “see destination” feature for drivers with low ride acceptance rate.

The company shall also not introduce policies that will result in drivers and operators being exclusive to Grab, in order to allow them to register with other TNCs through a multi-homing scheme.

PCC Commissioner Johannes Bernabe noted that these commitments shall be implemented starting Friday.

The PCC will be monitoring Grab's compliance with its submitted voluntary commitments through a third party monitoring, he added.

The third party monitoring will be nominated by Grab but will be chosen by the PCC. The third party monitoring shall also come up with a quarterly report to be submitted to the Commission, it was explained.

But the monitoring expenses will be shouldered by Grab, which is expected to reach PHP12 million, covering a one-year period.

PCC will subject Grab to fines of up to PHP2 million per breach of the conditions.

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