PCC approves Grab-Uber deal with conditions

The Philippine Competition Commission (PCC) has approved Grab’s acquisition of Uber in the country but subjected it to service quality and pricing standards.

The PCC said that the conditions for clearance were part of the voluntary commitments signed by Grab on Thursday to address the competition concerns raised by the antitrust authority. Any breach of the conditions will subject Grab to fines of up to Php2 million per breach, or unwinding of the transaction.

Below is the PCC’s “Commitment Decision” detailing Grab’s undertaking to address competition issues, namely:

• Service Quality Commitment: Grab shall commit to bring back market averages for acceptance and cancellation rates before the transaction, and response time to rider complaints.

• Fare Transparency Commitment: Grab will revise its trip receipt to show the fare breakdown per trip, including distance, fare surges, discounts, promo reductions, and per-minute waiting charge (if reinstated by LTFRB).

• Commitment on Pricing: Grab shall not have prices that have an “extraordinary deviation” from the minimum allowed fares. Grab will be penalized equivalent to 5% of Grab’s commissions, or up to P2 million, in the identified trips with extraordinary deviation that do not have sufficient justification.

• Removal of “See Destination” Feature: Grab will remove “see destination” feature for drivers with low ride acceptance rate.

• Driver/Operator Non-Exclusivity Commitment: Grab shall not introduce any policy that will result in drivers and operators being exclusive to Grab. Current Grab drivers/operators are allowed to register/operate under other Transport Network Companies (TNCs) through a multi-homing scheme.

• Incentives Monitoring Commitment: Since incentives may result in drivers remaining exclusive to Grab, and thus affect its competitors’ conditions of entry and the ability to expand, the Commission shall monitor and evaluate Grab’s incentives on the basis of mandatory quarterly reports.

• Improvement Plan Commitment: Grab will implement the following: (1) enhance driver performance standards, (2) adopt a Driver Code of Conduct, (3) establish a Grab Driver Academy; (4) adopt an emergency SOS feature, help center, and passenger no-show feature; (5) adopt a Passenger Code of Conduct; (6) maintain dedicated service lines subject to prevailing labor regulations; (7) adopt a Driver Welfare Program; and (7) implement a Driver Rewards Program.

The PCC’s Commitment Decision holds Grab to a standard as if Uber were present in the market. In effect, while Grab operates as a virtual monopolist, the commitments assure the public that quality and price levels that would prevail are those that had been when they still faced competition from Uber. Moreover, the commitments ensure that the merger will not make it more difficult for new players to enter and grow,” PCC Chairman Arsenio M. Balisacan said.

source: PCC