Grab gives fare subsidies to TNVS drivers

By Aerol John Pateña

June 19, 2018, 5:20 pm

MANILA -- Ridesharing firm Grab Philippines has rolled out its subsidies to drivers Monday to help them mitigate the impact of the suspension of the PHP2-per-minute travel charge by the Land Transportation Franchising and Regulatory Board (LTFRB).

This as Grab said that the earnings of its drivers have declined since the per-minute charge was suspended last April.

Grab is expected to spend more than PHP100 million a month for the fare subsidy as it ensures to provide proper income to drivers of transportation network vehicle services (TNVS) for them to earn a decent living while assuring that trips are still affordable to passengers.

“Based on our computations, a TNVS driver needs to make at least PHP330 per hour to be able to properly provide for his family’s needs and to cope with the traffic, high fuel and vehicle maintenance costs,” Grab country head Brian Cu said in a statement Tuesday.

“Since PHP2-per-minute component was suspended, we received a lot of painful complaints from our partners that their earnings are not sufficient anymore to make a decent living. That’s why we decided to step in,” he added.

Ideally, TNVS drivers should be earning at least PHP5.50 per minute or PHP330 per hour, according to the ride-hailing firm.

The fare subsidy will be based on the duration of riding hours of passengers and will ensure that drivers will get the ideal fare rate as computed by Grab’s system.

“For example, if a ride from Makati to BGC (Bonifacio Global City) takes an hour because of heavy traffic despite short distance and fare is computed at PHP120 only. Grab will return to the driver the PHP210 difference to make sure he made PHP330 for that one hour trip. The subsidy will run as long as it’s needed and for as long as we have resources to do so,” Cu said.

Grab is making an average of 600,000 bookings that increases up to 800,000 during peak hours while TNVS supply in its platform remains at 33,000.

The firm has earlier said that it is seeking for the migration of about 6,000 drivers to its platform, who were displaced following the halt of Uber’s operations last April.

The operating cost of Grab Philippines has increased to PHP4.57 billion last year from PHP2.45 billion in 2016 while its net losses amounted to PHP2.92 billion in 2017 compared to PHP1.56 billion in 2016.

The increase in Grab’s operating costs was attributed to revenues from the 20 percent commission from rides that are being used for driver incentives. (PNA)