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When the only choice is ‘no choice’

June 25, 2019



IT seems the popular sentiment among commuters nowadays remains the same — they would rather wait out the road congestion than brave the traffic along EDSA (or anywhere in the metro, for that matter). But it wasn’t always like this.

Frustrated by the worsening traffic situation in the metropolis, commuters found refuge in the ride-sharing application Grab once it entered the Philippine market in 2013. Shortly after, another competitor, Uber, entered the market as well.

The entry of the two ride-sharing companies into the Philippines was hailed as a godsend for the daily traveler who long craved for alternative modes of public transportation. All too often we hear of taxi drivers rejecting passengers because the trip isn’t worth their while. Other than that, it was common for drivers to ask for extra payment on top of the meter rate. This on top of news reports about dangerous, syndicate-driven encounters where the taxi driver himself was an accomplice in the crimes committed.

The entry of Grab and Uber was a welcome change that saw the concept of sharing-economy gain popular acceptance in the country. Not only was it safe, easy to access (since it is accessible through a mobile app), and reasonably priced, it also afforded commuters a comfortable and hassle-free experience.

Fast forward to 2019. Grab eventually bought out Uber’s entire Southeast Asia operations, including Uber’s business in the Philippines, and everything seems to have gone downhill since. What was once a hassle-free and reasonable experience has turned into an expensive, unreliable and tiring endeavor.

Just last week, I talked to a colleague who has gone back to using the regular taxi instead of the Grab application, citing the unreasonable prices and irritation that he has to go through to book a Grab. Case in point: to get from Bonifacio Global City to Quezon City, a Grab can cost upwards of P600 for a one-way trip. Imagine going back and forth. If you had a car, you could almost completely gas it up for that price! And at the forefront of this mess are government agencies like the Philippine Competition Commission (PCC) and the Land Transportation Franchising and Regulatory Board (LTFRB).

Since Grab’s acquisition of Uber in 2018, the former has basically operated as a monopoly, with unchallenged dominance of the ride-sharing market. Both the LTFRB and PCC were expected to help create an environment that fosters healthy competition. In fact, the Philippine Competition Act (Republic Act 10667) mandates that “the Commission and the sector regulators [like LTFRB] shall work together to issue rules and regulations to promote competition, protect consumers, and prevent abuse of market power by dominant players within their respective sectors.”

Yet here we are, years after Grab acquired Uber, worse off than when we started. For one, the LTFRB could do something other than increase the Transportation Network Vehicle Service (TNVS) cap for ride-hailing services. As expressed by Grab drivers themselves, LTFRB could review its policy on acquiring permits to operate a TNVS.

More importantly, the regulatory agency should conduct a holistic review of the rules and regulations currently in place. Is the lack of competition attributable primarily to the dearth of capable competitors? Or is it also being hindered by policy? I refuse to believe that it is only the former.

I recall that early this year, the LTFRB denied the application of Indonesian ride-hailing firm Go-Jek to enter the Philippine market on the ground that it was a foreign-owned company, and therefore supposedly prohibited from operating as a public utility. If so, why did it allow Uber, then mostly foreign-owned, to operate in the country before? Is this another case of regulatory capture?

True, there are other accredited ride-sharing companies operating in the country like MiCab, Hirna, Hype, Owto, GoLag, ePickMeUp, Snappy Cab and Ryd Global. But these are homegrown outfits too small to give Grab any real competition.

Ride-sharing is merely one industry where there is a single or few dominant players controlling the market. For example, the telecommunications, electricity and water industries have long been controlled by a major players despite the public clamor for new (and better) services. And these industries all involve basic necessities.

According to a 2018 World Bank study, the Philippines, unlike its Asia Pacific neighbors, only recently passed legislation to tackle anti-competitive behavior in business. There is a lot of ground to make up. Part of the PCC’s powers is to promote entry into the markets and prevent market abuse.

Instead of allowing the status quo to endure, PCC should be proactive in promoting competition in key sectors that have long been dominating the Philippine market to the detriment of consumers. It can begin by compelling reforms in industries to allow the easier entry of able competitors. Who wants to continue paying P600 for an 18-kilometer trip? Or endure another three-month water shortage, for instance? I certainly don’t.

Every Filipino has the right to choose what is best for him or her. But to exercise that right, there has to be something to choose from in the first place. Which begs the question — at this point, do we have a choice?

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