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PCC tells Grab: Keep service quality, fare transparency offers.

THE Philippine Competition Commission (PCC) has instructed Grab to continue implementing until October its voluntary commitments on service quality and fare transparency as part of the conditional clearance of its acquisition of Uber.

The PCC extended Grab's voluntary commitments for 71 days, or from August 11 to October 20, to provide the government and involved parties the time to negotiate a new or amended set of commitments intended to address competition issues in the ride-hailing market. Grab was first ordered to undertake steps on service quality and fare transparency for a period of one year, or only until last Saturday.

Aside from the existing voluntary commitments, the PCC is planning to clamp down on Grab's price surges and driver discrimination resulting from booking cancellations.

PCC Chairman Arsenio M. Balisacan said the urgent task for his agency and Grab is to come up with a new list of measures for the firm to carry out. These commitments, he argued, should safeguard riders from any anticompetitive practice that may arise from Grab's virtual monopoly of the ride-hailing market.

If the PCC and Grab fail to reach an agreement on a new set of voluntary commitments, the conditional clearance on the merger will be reevaluated by the competition body.

'The task ahead for PCC and Grab is to ink a renewed set of commitments that is fair and reasonable and that protects consumers from Grab's currently unchallenged dominance in the market. We also hope to raise the level of competitive intensity in the market and bring about market conditions conducive to new entrants,' Balisacan said in a statement on Tuesday.

The existing voluntary commitments are on service quality, wherein Grab should bring back market averages for acceptance and cancellation rates before the acquisition, and response time for rider complaints; and on fare transparency, wherein Grab should show the fare breakdown per trip, including distance, fare surges, discounts, promo reductions and per-minute waiting charge in every trip receipt.

Also, Grab was tasked to maintain pricing at a level comparable to the period prior its buyout of Uber. Grab should also not introduce any policy that will result in drivers and operators being exclusive to the firm.

There were also commitments on incentives monitoring and improvement plan, both of which seek to keep in check Grab's position in the market.

The PCC last year initiated a motu proprio review of the Grab-Uber merger and raised competition concerns resulting from the transactions. The competition body argued the buyout virtually made Grab a monopoly in the ride-hailing market.

The PCC's conditional approval of the transaction lies upon how Grab will comply with the commitments it set. These measures are designed to maintain the conditions in the market as if Uber or another competitor is present to set a competitive constraint on Grab. They are also aimed at making it easy for new players to come in and rival Grab's position.

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Publication:Business Mirror (Makati City, Philippines)
Date:Aug 14, 2019
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