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LTFRB wants to curb TNCs' right to set 'dynamic' rates

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MANILA - Responding to mounting complaints about unreasonable surges in fares charged by so-called TNCs (or Transport Network Company) like Grab and Uber, regulators are moving to curb the ways by which these can impose rates arbitrarily.

The Land Transportation Franchising and Regulatory Board (LTFRB), for one, was besieged with numerous complaints about surge rates during the last holiday season.

The agency was also alarmed by its discovery of an apparent means by which TNCs can create an artificial spike in rates, by having more drivers go offline, thus causing a sharp rise in demand.

Atty. Aileen Lizada, LTFRB board member, said,"That's what we want to avoid: artificial simulation of demand because they can go offline. When they go offline, [of course the] algorithm [sets in]. With the algorithm, it is the computer that computes, does problem-solving. So walang cars on the road, so they will put a surge. But we do not like artificial simulation nung demand."

A typical case of what one commuter deemed an arbitrary surge is the Christmas eve experience of Mara Yuhico. She booked a vehicle with Grab, but as her receipt showed, the P300 she usually paid for from Pasig to Alabang had surged to more than P600.

Mara said she had no choice but proceed with the booking because she needed to get somewhere and no other rides were available.

"At that time it was like I was thinking, okay I'll just go ahead with it, kasi yun talaga yung lumalabas na price. Nakakainis; sana makabalik 'yun pero wala na, nagastos ko na eh [because that's really the price they're reflecting. But it's so dismaying; I wish I could get back my money, but it's gone]."

The LTFRB now plans to restrict the TNCs' power to simply set their own rates.

According to a department order of the DOTC in 2015, the transport network companies are allowed to dictate their charges on customers. But in LTFRB's view, such authority should be lodged with it.

It noted how, for petitions to adjust even slightly -- say, a mere 50 centavos -- their fares, jeepney and bus owners must undergo extensive hearings.

The TNCs, meanwhile, have an explanation for their setup.

"Our technology allows for dynamic rates, dynamic pricing," said Grab Philippines' country director Brian Cu.

He added that with the "jeepney or taxi, [it] is all about feeling. The taxi driver feels [there's some] traffic [in a certain area], so dagdag P100. [But in our case], we know, because we have the benefit of technology on our side."

Grab, meanwhile, said it is ready to give a refund to passengers who feel they were charged unreasonable rates during the holidays.

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