Commuter groups alarmed Grab’s acquisition of Move It to hike fares

Commuters groups have raised alarm over the acquisition of the motorcycle taxi firm Move It by Grab Philippines.

During the hearing of the House committee on Metro Manila development on Wednesday, the groups Lawyers for Commuters Safety and Protection and Digital Pinoys said Grab's entry could result in fare hikes and the firm's "monopoly" of the motorcycle ride-hailing service.

Grab is currently into delivery, food, ride and retail platform.

Company executives said Grab engages in legitimate and fair business, and looks after the welfare of its drivers and customers.

“With the acquisition by Grab of Move It, basically they are entering the pilot study via the backdoor. Naniniwala po tayo na hindi totoo na Move It will operate independently of Grab kasi walang bumibili ng kumpanya para lang i-relinquish yung control dito,” Ronald Gustilo of Digital Pinoys said.

“Natatakot po tayo bilang consumer na mangyari sa motorcycle taxi yung TNVS, kung maalala natin, nung 2018 binili ng Grab yung Uber. Sobrang laki ng tinaas ng pamasahe,” he said.

Last March 2018, Grab Philippines and Uber Technologies Inc. entered into an operational merger on the heels of an acquisition deal between the two Transport Network Companies.

Gustilo recounted that his daily travel of 25 kilometers then costs from P200 to P250. It has now increased to P500 and during peak hours, the fare reaches P800.

“Meron din pong findings ang Philippine Competition Commission (PCC) na itong Grab nag-oovercharge. So natatakot po tayo na by the way of their entry to the motorcycle pilot study through Move It eh gawin itong mga practices na kinakatakot natin,” he said.

Ariel Inton of the Lawyers for Commuters Safety and Protection said he is concerned that Grab may monopolize the motorcycle taxi business as only three accredited companies — Angkas, JoyRide, and Move It — joined the pilot test of motorcycle taxi.

“Dun po kami medyo na mayroong agam-agam. Tatlo lang po yung na-accredit. Kapag nagkaroon po ng bago at ito po ay through acquisition of any of the three then it's a backdoor entrance. Hindi po dapat iyon dahil kinakailangan dumaan sa technical working group at committee,” Inton said.

“Pag pumasok po ang Grab through Move It, we will see Grab monopolizing transport network vehicle service (TNVS) and motorcycle taxi,” he added.

In response, the Grab Philippines maintained that it does not overcharge its customers and strictly complies with the prescribed rates under the fare matrix guide of the Land Transportation Franchising and Regulatory Board (LTFRB).

“Regarding overcharging and shortchanging, Grab does not in anyway overcharge its customers nor shortchange the income of its driver partners and in fact Grab prides itself on its ability to create a balance and sustainable market place while offering competitive rates aligned with the needs and feedback of its driver and partners and merchant partners and consumer,” lawyer Katrisha Kok, legal counsel of Grab Philippines, said.

The ride-hailing firm also said it wants its drivers to enjoy a living wage "beyond subsistence level."

"Ultimately, such strict compliance with the prevailing government policies is a status quo and Grab endeavors for it so for the years to come,” Kok said.

She said that Grab Philippines remained fully committed to protect the income of drivers and continues to engage its community of drivers on a shared mission of supporting their families through the livelihood opportunities offered on its platform amid COVID-19 pandemic.

Nicka Hosaka, another legal counsel of the company, said that the acquisition  of Move It was a “business decision.”

“Ito pong investment ng Grab sa Move It ay hindi po namin siya sinasabi na backdoor entry sa ating pilot study. Ang pag-invest po ng Grab sa Move It ay isang business decision and in fact even other players in the pilot study have their own investors and these investors po were also not questioned by these different groups. Mayroon din pong ibang mga kompanya na nag-invest,” she said.

Grab Philippines senior director for operations and strategy Ronald Roda earlier said that Move It will not be merged with Grab, and it will continue to operate as a separate entity and use its own platform.

Roda declined to disclose the cost of the transaction. However, he said that the amount is below the PCC’s P1-billion threshold for compulsory notification of mergers and acquisitions.

In a separate statement, Move It said its deal with Grab is "above board."

“We are happy to disclose that the acquisition complied with the law, and all approvals required for the acquisition have been obtained. It did not violate any requirement of the MC Taxi TWG,” Move It said in its opening statement read by its lawyer Ann Albana during the hearring.

“We wish to assure the public that the operations of Move It will still be under the supervision of the MC Taxi TWG, and it will continue to abide by MC Taxi Guidelines, especially on the safety and welfare of the consumers,” it added.

The firm said partnering with Grab for the acquisition is "pro-competitive and pro-consumer."

"Strengthening Move It will improve and develop competition and satisfy the increasing unserved demand for motorcycle taxis,” Move It added.

Meanwhile, Marikina 2nd District Representative Stella Luz Quimbo urged the PCC to monitor Grab's acquisition.

“Inaasahan po namin ang PCC, kayo po ang kakampi ng consumers, kayo po ang tagabantay ng regulated entity at bagamat po dito sa motorcycle taxi market mukhang wala naman paglabag on its face kasi napakaliit ng market share at this point in time dahil maliit lamang ang Move It,” Quimbo said.

“Ang sinasabi ko po bantayan natin ang potential dominance because we know how platform markets work, we know that. Sa ganitong klaseng larangan paunahan sa pagcapture ng buong market so this is one step in given that technology is there,” she said.

“Because all of the technology is there, may danger ng potential dominance, and because of previous behavior may possibility na magtaas ng presyo. Yun lang ang aming request sa PCC, na bantayan mabuti,” she furthered.

Based on its initial assessment , the PCC said the transaction “likely did not breach the thresholds for compulsory notification.”

“Hence, the parties need not wait for approval from the PCC to consummate the transaction,” PCC officer-in-charge chairperson Johannes Bernabe earlier said in a statement.

Despite not breaching the compulsory threshold for notification, Bernabe said the antitrust body may still launch a motu proprio review of the transaction if it finds reasonable grounds to believe that the deal will result in substantial lessening of competition in the relevant markets.—LDF, GMA Integrated News