By Alexandria Dennise San Juan
The Land Transportation Franchising and Regulatory Board has imposed a P10-million fine to ride-sharing firm Grab Philippines for overcharging its riders through its P2 per minute fare component.
In the order dated July 9, 2018, My Taxi.PH, Inc. (Grab) was ordered by the Board to “pay the penalty of P10 million” citing that its imposition of the travel fare rate is “invalid and without authority from the Board, for which the Respondent is to suffer its consequences.”
“If we are to compute the penalty for each case of overcharging under Joint Administrative Order no. 2014-001 in the amount of P5,000, and disregarding the repeat violation committed which would result to progressive rate of penalty, and multiplying the same to the number of successful rides which charged the unauthorized time rate charge of P2 per minute, the penalty imposable will amount to trillions of pesos,” the order read.
PBA Partylist Representative Jericho Nograles has accused the transport network company of amassing at least P3.2 billion from its riders for “illegally” imposing the P2 extra travel time charge on top of its government-approved fare rate resulting in a series of hearings and the suspension of the P2 per minute charge.
The nine-page order further stated that the Board is “mindful of the rule that the violation of terms and conditions would merit cancellation of the accreditation of the Transport Network Company. However, the paramount consideration of the Board is the overriding interest of the riding public, which constrains the Board not to impose such penalty of cancellation.”
Aside from the hefty fine, the Board also directed Grab to reimburse the riders who were charged with P2 per minute fare from June 5, 2017 to April 19, 2018 through rebates.
According to the LTFRB, the rebate can be availed of 20 days from the time the decision becomes final.
“The amount of the rebate shall be limited to the portion of the income of the respondent only, directly related to or arising from P2 per minute, during the period of its unauthorized imposition,” the order said.
The LTFRB also directed Grab to submit a report of compliance of the Decision of the Board, a week from the time the rebate has been fully implemented.
According to the LTFRB, Grab can file a motion for reconsideration within 15 days. If the board denies the motion, Grab can appeal to the DOTr.
The order released to reporters Wednesday was penned by LTFRB Chairman Atty. Martin Delgra III and Board Member Engr. Ronaldo Corpus.
Board Member Atty. Aileen Lizada also signed but with a note saying “I dissent. See separate opinion.”
Based on the three-page copy of Lizada’s dissenting opinion, it stated that Grab’s P2 per minute was still covered by a 2015 department order when it was implemented by the ride-sharing company mid-2017.
According to Lizada, the P2 travel time charge on top of Grab’s P40 base fare and P10 to P14 per kilometer rate has legal basis.
“The authority given to transport network companies to formulate their fare structure can be clearly seen in the Department Order 2015-011 of the Department of Transportation and Communications,” the statement said adding that the order only gives them the power to “oversee” the fare rates.
During one of the hearings, Grab said it implemented the travel charges June 2017 without the knowledge of the riding public.
But the TNVS provider maintained that it was legal and also cited the original 2015 order of the DOTC.
Last month, the DOTr released an order which gives full authority to the LTFRB to regulate and supervise TNCs and transport network vehicle service (TNVS) units operating under them.
The DOTr said that the newly-signed order intends to correct DO 2015-11 issued by the previous administration, by bringing back the regulatory authority to the LTFRB, and not in the “hands of private individuals.”
Grab Philippines has yet to release an official statement regarding the issue.
“Grab will reserve comment for now until we have fully studied and analyzed the matter with our legal team. We will reach out in due time,” Grab Philippines Public Affairs Head Leo Gonzales said.
Grab Philippines Head Brian Cu, in his Facebook post, said they stand by the legality of its P2 per minute fare component as stated by D.O. 2015-011.
“We are currently studying our legal options regarding LTFRB’s order. But no matter how we decide to move forward from this, be assured, Grab will stay,” he said.
On the other hand, complainant Nograles thanked those who supported the “victory” for consumer rights.
“The LTFRB Order confirms that Grab indeed engaged in illegal charging affecting 67 million rides from June 2016 to April 2017. They have lied and cheated the consumers and drivers. Their illegal acts are tantamount to large scale estafa,” Nograles said in a text message.
“I thank all those who supported this victory for consumer rights and sternly warn Grab and all other companies to follow the law or be exposed and pay the price,” he added.