Last April, I wrote a scathing column in The Philippine Star’s Motoring section about the terrible service of Grab. That was soon after halting of Uber’s operations with the merger-takeover of Grab and Uber. The piece centered primarily on the non-availability (or at the very least the lack) of rides, which wasn’t much of an issue when Uber was around.
Both transport network vehicle service (TNVS) companies, perhaps in their haste to get the paperwork done, promised a seamless transition. Needless to say, as far as the riding public was concerned, a “seamless transition” meant no more than using the Grab app instead of Uber and enjoying the level of service and availability they enjoyed with Uber—or with Grab (in case they were Grab users) when Uber was around.
Unfortunately, that didn’t turn out to be the case. You only needed to briefly scroll through your Facebook feed to see more than a handful of complaints about the non-availability of rides, high fares charged, and, of course, cancelled rides.
Fast forward four months. It’s now August and I’m happy to report that since school started this month, my daughters have never had to wake me up to bring them to school because they couldn’t book a Grab ride, their ride cancelled on them, or because the waiting time was so long they’d miss their first class. That happened with dismaying regularity last April. You’d be furious, too, if you had to get up at 5:00 a.m. because your kids can’t book a ride—something that wasn’t an issue when Uber was around.
So, there is an improvement. But, is it enough? A colleague based in the east was complaining on Facebook just over the weekend that he couldn’t book Grab no matter how long he tried. So, the problem is still there. Which is why I did a little digging. Here is what I found…
In January 2018, the LTFRB ordered a 45,000 common supply base of TNVS cars, less than a third of the 125k in operation at that time
In February 2018, the cap was raised to 65,000 common base. In parallel, the LTFRB, with the support of an independent party and data from Uber and Grab, created a list of 55k vehicles, which is currently recognized as the official master list for processing of Certificates of Public Convenience (CPCs) and Provisional Authorities (PAs).
Since then, only 42,000 active vehicles are now left in the system (i.e. 13,000 gap from vehicles in the master list). Out of this, 35,000 vehicles (i.e. 83 percent) are active daily.
When Uber pulled out of the Philippines last March, it was estimated that there were around 50,000 active vehicles at that time; out of which, around 43,000 vehicles were active daily (24,000 from Grab and 19,000 from Uber).
It was discovered during the transition that approximately 6,000 vehicles from Uber were not part of the master list and by LTFRB decision, were not allowed to transfer to Grab nor to other transport network companies (TNC).
Furthermore, an additional 2,000 vehicles (and their owners) chose to not join Grab after the Uber pullout.
As a result of all of this, the daily active base has gone down to around 35,000 drivers (24,000 from Grab and 11,000 from Uber).
The TNCs have been asking LTFRB to open the remaining 10,000 slots to increase the supply of cars but LTFRB has opted to not take immediate action until very recently. Furthermore, LTFRB does not seem to have an effective logistical means to replace inactive and dormant drivers in the current master list.
Bottom line? There have been only 35,000 drivers available to serve 600,000 bookings a day, and worse on rainy days. This number continues to decrease following sanctions such as suspension and number coding.
The decreasing number of TNVS cars in Metro Manila has resulted in a palpably short supply. More passengers are waiting for longer hours and, worse, getting stranded on the road because they could not get a ride.
For one thing, the allocation rate for the Philippines is the lowest in Southeast Asia. The local TNCs’ ability to allocate cars within the first few tries (EFTA) is down to 40 percent, the lowest in Southeast Asia. Said another way, this means they are only able to allocate rides to four out of 10 passengers. Average pick-up time (waiting time from booking confirmation to actual pick-up of passengers) has increased this July to eight minutes from a Jan-March average of seven minutes.
Meanwhile, LTFRB said that they will review the common supply base cap every three months. They have not revisited the cap since its January 2018 rollout (or at least I have yet to hear any announcement of such). The limited TNVS supply is making it difficult for the new local TNC players to get drivers and start operations (e.g. newcomer Hype was said to have had to move their launch date several times because they don’t have enough drivers for a proper launch).
The LTFRB evidently seems to be more focused on other matters such as pricing when the real TNC issue is supply. Following the imposition of the P10 million fine on Grab, Hype and OWTO are now reportedly also being questioned by the LTFRB on pricing. LTFRB does not seem to share the urgency with regards to addressing the vehicle shortfall despite mounting calls from multiple stakeholders (e.g., legislators, TNC’s, TNVS drivers, the riding public, etc.).
I say that the riding public will always have the strongest vote. If these companies start charging exorbitant rates, they will most likely find themselves at the receiving end of a dwindling business model. At the moment, strong demand and the lack of supply are driving up prices—prices that the LTFRB is trying to artificially control.
But if the LTFRB allows greater supply, then the pricing should inevitably be more competitive. That creates a win for the riding public, a win for more TNVS drivers (and more TNC staff) who find new or additional sources of income, and, believe it or not, a win for the LTFRB.
Ride-sharing apps are the wave of the future. It’s time we embrace technology and enjoy its fruits. Because it’s either that or return to the tyranny of dilapidated taxicabs (with their tampered meters) for the rest of us.
