Ride-sharing Service Grab Implementation in The Philippines: Problems and Challenges

Everything in the modern world is centered around ease and comfort. The innovation of technology has always been geared towards finding a way to make human lives easier. However, it has long been a difficulty for us to achieve a solution when it comes to Metro Manila traffic. Many have thought of ways to ease the stress and lessen the long hours spent during commute, which brings us now to the era of Ride-Hailing Apps.

The means of transportation now range from an unlicensed taxi service to public utility vehicles (PUVs) to ride-sharing services such as Grab, the most popular ride-hailing application in the Philippines. Grab is called a "ride-sharing" service, a misnomer when applied to single-fare rides but accurate when referring to the carpool service that the company offers (PCMag). Since its arrival in the Philippines in early 2013 (Calvin), Grab has been a staple application in a lot of people’s smartphones. But why is it that despite these so-called “improvements”, the situation of the Metro Manila traffic has just gotten worse? Some may say that there are barely any problems for the consumers of these ride-hailing apps, but as much as there are pros to it, there are cons as well. Price surging is the number one reason that comes to mind. This is the method of pricing in the free market that depends on the supply -- number of available cars, and demand -- number of booking passengers (Jalloh).

Often during rush hours, the price could quadruple its own compared to when there is no rush hour. Commuters then face the dilemma of deciding whether it is worth paying tenfold the fare of a bus for the luxury of a semi-private car. Most of the time though, most of the drivers are nowhere to be seen when they are needed the most. In an interview I had with my neighbor who is a Grab driver, he said that usually, he and his fellow drivers do not go out to drive during rush hours because the money they make in the duration of that time period is not worth their expenses; may it be in terms of gas, effort, or time. If you think about it, commuters have this sense of relief at the back of their minds that even if the traffic is extremely heavy, they can travel in comfort because of Grab. However, in reality, there is only a slim chance of booking a ride during rush hours. To simplify, in the customer’s perspective, it’s like considering a choice you can’t even choose. All of this is because of the heavy traffic, and how much less the drivers earn because of the difficult circumstances.

Also to my surprise, I learned that Grab drivers earn less than what they work for. There used to be 43,000 drivers before Grab bought off Uber in Southeast Asia1, but last May 2, 2018, there were roughly 35,000 drivers serving 600,000 bookings a day in the Philippines (Rey). Since then, the numbers have continually dropped. This is due to the recent suspension of the P2-per-minute fare, which left a lot of drivers no choice but to opt out because of the low income. It is quite suspicious and contradicting how the consumers find utilizing Grab expensive, yet the drivers don’t even get to earn the amount of money they need that is also worth their time and effort. Grab gives incentives to its drivers only if they reach the quota which is not reasonably reachable on an eight-hour shift.

According to Jericho Nograles, the PBA Party-list Rep, in a consultation with the Grab drivers, it was only possible to earn if they ply the roads for 18 hours, 6 days a week (ABS-CBN News). “The Land Transportation Franchising and Regulatory Board (LTFRB) suspended Grab’s P2-per-minute charge on April 18, as the board said it had not approved the additional fare” (Rey). This is because last April 2018, Grab was accused of illegally charging its customers more than its government-approved pricing scheme. Because of this, the company was demanded to refund its customers a total of P1. 8 billion in alleged overcharged fares for the last 5 months alone (Rey). When a passenger does book a ride, there is no definite assurance that he or she will actually get to ride the car. Personally, I have experienced this a number of times.

Usually, the drivers tell you to cancel the ride so it won’t affect their cancellation rate. “The platform has a cancellation ‘threshold’ of 20%, meaning the driver risks losing out on incentives if he taps the cancel button. If the cancellation threshold exceeds 30%, a penalty will kick in. The driver will be charged a higher commission by the company, meaning he won't make as much money from trips. If the thought of less income isn't enough to deter a driver from cancelling, he or she will be suspended and eventually banned. ” (Laurel)Last March 2018, a story about a vlogger’s experience on Grab went viral. Elizabeth Boon booked a ride home and she got a ride six minutes away. The driver happened to be dropping off another passenger, so she waited for about ten minutes before she realized that the car was not moving, according to the GPS. She tried to contact the driver by all means possible, but she did not get a reply. Twenty hours later, the driver was still “on the way” (Ng).