MANILA -- The Philippine Competition Commission's (PCC) review on the consumated Grab and Uber deal revealed that fares on transport network vehicle service (TNVS) are “generally higher” than other modes of public transportation including taxis.
This information is contained in the Statement of Concerns (SOC) report on the Grab-Uber deal done by PCC’s Mergers and Acquisition Office (MAO) released to the press Monday. The antitrust body through its report, reiterated that the acquisition of Uber by Grab has resulted in a "substantial lessening of competition" in the ride-hailing market.
But the review also found out that “an overwhelming majority of riders” would still continue using on-demand car-based private transportation online booking service via mobile ride-hailing application despite a 5 to 10 percent increase, “which is borne out by actual events of post-transaction”.
It was also noted that there are key qualitative differences between TNVS and other modes of public transportation.
Moreover, the PCC stated in the SOC that in the aftermath of the merger, Grab now controls 93 percent of TNVS registered vehicles, solidifying its unrivaled dominance in the relevant market.
Despite the increase in supply of drivers after the deal, Grab fares have continued to increase. “This upward trend in price is apparent through the higher fares and increased frequency of surge-pricing applied by grab,” the SOC read.
“The review indicated that prior to the transaction, prices charged by Grab have been flat to declining, while post-transaction prices have been increasing, despite the supply of drivers available to Grab post-transaction,” it added.
The Commission also cited the declining quality of service of Grab after the transaction, which include increased driver cancellation, forced cancellations of rides, and increased waiting time. “This is compounded by the loss of a competitor in Uber where trips were likely less to be cancelled due to features which mask the destination of a prospective rider until the start of a trip,” the SOC noted.
PCC’s issuance of SOC is part of its motu proprio review on the Grab-Uber deal launched on April 3. The Commission has given the parties time to file their comments on the SOC.
The PCC earlier said that based on its review, the Commission has the power to approve or block the deal. But the parties can also give their commitments and remedies to address the anti-competitive concerns of the PCC. (PNA)
