Grab Is Seeking a P20 Hike in Base Fare
Grab Philippines has applied for a P20 increase in its base fare for its GrabCar service to help retain existing drivers and entice more into its platform.
The company said there are about 25,000 active GrabCar drivers currently plying the roads. That’s only a third of its fleet pre-pandemic.
“With the increase in gas prices, it is much, much harder to attract drivers into the platform because they are afraid of what might happen,” said Grab senior director for strategy and operations Ronald Roda. “Not to mention the existing ones are complaining that they are kind of at the end of their patience as far as gas prices are concerned,” he said.
Gas prices are nearing record levels, rising nearly 40 percent from pre-pandemic levels due to a myriad of reasons, including the Russian invasion of Ukraine. This has put a strain on the livelihood of transport network vehicle service (TNVS) drivers. Many have reported having their cars repossessed after they failed to make payments. Others have said the high fuel costs are just too prohibitive, with their income falling by as much as 20 percent.
Roda said that Grab has been helping drivers by reducing its cut on the variable commission scheme, as well as providing a peak-hour incentive.
But these are not enough, he added, which is why the company has asked for the P20 fare hike from the Land Transportation Franchising and Regulatory Board (LTFRB). The hike will translate to additional income of about P200 per driver per day.
“P200 is about 2.5 liters of additional gasoline,” Roda said. “That’s what we’re just asking now. It's not a full price increase but something that is faster just to be able to help the community. We want to be, in many ways similar to the jeepney (drivers) asking. Just give us a provisional one and we can work on a longer, more sustainable increase.”
The LTFRB is set to hear the fare hike petition on June 29.
Roda said the approval of the provisional base fare increase would result in existing drivers not quitting the platform and will help encourage other drivers to apply.
Grab’s base far currently sits at P40 for its four-seater option and P50 for its six-seater service. Minimum fare is at P80. Roda said the petition for the P20 hike is enough to assist with the sky-high fuel prices, although Grab still intends to conduct dialogues with the transport regulator about the entire fare matrix.
“But this is complicated,” he said.
Grab had previously urged the LTFRB to open up more slots for TNVS applicants to fill the high demand for more drivers on the road. The LTFRB has since opened 8,000 new slots to the TNVS community, which Roda said is currently being filled up “very, very slowly.”
The Grab exec added that Grab’s current driver supply means passengers have a three-in-10 chance of getting a ride immediately, versus the eight-in-10 chance pre-pandemic.