Conditional OK for Grab-Uber deal
Competition regulators have conditionally approved the controversial Grab-Uber merger, warning that breaches of service commitments would lead to substantial fines or an outright cancellation of the transaction.
In a media briefing, the Philippine Competition Commission (PCC) said the deal had been subjected to service and pricing standards aimed at addressing customer complaints.
“The PCC’s Commitment Decision holds Grab to a standard as if Uber were present in the market,” commission Chairman Arsenio Balisacan said.
“In effect, while Grab operates as a virtual monopolist, the commitments assure the public that quality and price levels that would prevail are those that had been when they still faced competition from Uber,” he added.
“Moreover, the commitments ensure that the merger will not make it more difficult for new players to enter and grow.”
The PCC, in a statement, detailed Grab’s commitments that it said were derived from voluntary pledges earlier made by the ride-sharing firm:
• Grab will return acceptance and cancellation rates, as well as response time to rider complaints, to the market averages seen before the acquisition.
• Trip receipts will be revised to show a breakdown that will include the distance traveled, fare surges, discounts and others.
• Grab prices should also show no “extraordinary deviation” from the minimum allowed fares.
• The “See Destination” feature will be removed for drivers with low ride acceptance rate.
• Grab will not bind drivers to an exclusive contract, meaning the latter can work for other transport network companies (TNCs).
• To further prevent exclusivity, Grab will have to submit quarterly reports on driver incentives to the PCC.
• Lastly, Grab will have to implement enhanced driver performance standards; adopt a Driver Code of Conduct; establish a Grab Driver Academy; adopt an emergency SOS feature, help center, and passenger no-show feature; adopt a Passenger Code of Conduct; maintain dedicated service lines subject to prevailing labor regulations; adopt a Driver Welfare Program; and implement a Driver Rewards Program.
“[A]ny breach of the conditions will subject Grab to fines of up to P2 million per breach, or unwinding of the transaction. Violations or arrangements intended to circumvent the application of the commitments by parties may likewise result in appropriate penalties,” the PCC said.
PCC Commissioner Stella Luz Quimbo said a third party would be monitoring Grab’s quarterly reports for a year. The period could be cut to six months if Grab is “able to show that there is already competition [in the market].”
Grab Philippines Country Head Brian Cu lauded the PCC’s decision and said the company would comply with the commitments.
“With PCC leveling the playing field by accepting Grab’s voluntary commitments, we hope that LTFRB (Land Transportation Franchising and Regulatory Board) will do the same by implementing a standardized TNC fare matrix as soon as possible,” he said in a separate press briefing.
Grab has currently 33, 000 drivers serving 600,000 bookings a day, Cu said.
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