LTFRB orders Grab to reimburse passengers, pay PhP 10 million fine

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Gov't slaps Grab on the wrist over PhP 2 per minute travel time issue

Grab is in hot water yet again, despite the fact that they have a near-monopoly as the single biggest player in the app-based ride hailing/sharing business in the Philippines (and the region).

The Land Transportation Franchising and Regulatory Board (LTFRB) has just issued an order to Grab (under the official business name MYTAXI.PH, INC.) in relation to the alleged charging of customers PhP 2.00 per minute of travel time, all without the authority from the LTFRB.

Grab claimed that they did not violate the terms of their accreditation as a TNC by the LTFRB and that they had the authority to formulate their fare structure under an older DOTC department order (2015-11), which saw the imposition of a PhP 2.00 per minute of travel time charge. Grab also responded by saying that the LTFRB had no jurisdiction to order the refund of the per minute rate. 

The LTFRB countered that the Department Order cannot contravene existing laws, and the Board cited Executive Order 202 that created the LTFRB as having the power to regulate the imposition of fare and fare adjustment on public utility vehicles. The LTFRB stated that their regulatory power over TNC fare structures was reaffirmed by a newer DOTR Department Order which amended the DOTC DO that Grab was citing as the basis for the fare. 

As such, the LTFRB ruled that Grab had “unilaterally imposed said time rate charge”, and that it is an “unauthorized delegation of legislative authority”.

The LTFRB further stated that if they applied Joint Administrative Order 2014-001 which mandates that the penalty for overcharging is PhP 5,000 for every instance, a countback would result in fines for Grab in trillions of pesos. 

In short, the LTFRB imposed a fine of PhP 10,000,000 on Grab, and ordered them to reimburse riders who were charged PhP 2.00 per minute from June 5, 2017 up to April 19, 2018. 

The reimbursement will come in the form of a rebate to Grab riders who used the service on those dates.

Below is the full copy of the order:

 

 

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