Ridesharing firm Grab Philippines said the increase in the number of cancelled trips by its drivers was brought about by the suspension of the Land Transportation Franchising and Regulatory Board (LTFRB) of the PHP2-per-minute travel charge.
Grab said its driver cancellation rate doubled to 11 percent last Friday. This was primarily caused by lower fares, resulting in the firm being able to service only half of the passenger demand.
“Drivers have to buy gas, pay the monthly amortization for the vehicle or the daily boundary, & when traffic stalls them, it is only the PHP2 per minute that saves their income. So with the PHP2 gone, many of our drivers earn less and drive less, if at all. No matter how willing they are to drive, they are left with no choice but to think of ways to recover their expenses. Sadly, most of them have resorted to cancelling booking especially when they know they will traverse traffic,” Grab country head Brian Cu said in a statement Monday.
Cu said 80 percent of the travel duration charge goes to the driver directly, while 20 percent is spent on driver incentives and rider promos.
Last Friday, Grab filed a motion for reconsideration before the LTFRB, explaining that the PHP2 per minute travel charge is legal and in accordance with a 2015 order of the Department of Transportation that allows transportation network companies to set their own fare rates.
Drivers will not earn a sustainable income and would be forced to quit their jobs as transport network vehicle services operators if the PHP2-per-minute charge is stopped, resulting in fewer vehicles for passengers, according to Grab.
The firm had presented its fare structure including the PHP2-per-minute charge, in a technical working group meeting with the LTFRB in July 2017, after imposing the charge the previous month.
Cu hopes that the LTFRB reinstates the travel time fare as this will benefit both drivers and passengers.
“Let’s face it: kapag lugi ang driver, hindi lalabas yan. Walang masasakyan ang tao (Let’s face it : if the driver is not earning, he will not drive. Commuters would have no rides),” he said.
In its order dated April 18, LTFRB Chairman Martin Delgra III said the suspension stands as the board investigates the issue.
The board said there was no mention of any travel time rate, which Grab has been collecting, when it released its order on the fare structure of TNCs on December 27, 2016.
The December 2016 order states that Grab should impose a flagdown rate of PHP40, with an additional rate of PHP10 to PHP14 per kilometer. (PNA)
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