MANILA — Ride-sharing firm Grab Philippines is eyeing to provide subsidies to its drivers to motivate them to render quality services to passengers amid the current limited supply of transportation network vehicle services (TNVS) units.
The enhanced incentive to drivers will also help Grab recoup the increase in its operating costs in the past few years.
“We will be providing spot incentives. These incentives will be applied the moment a booking is made. We need to widen the radius in order that our vehicles will have larger areas to operate,” Grab country head Brian Cu said in a press conference in Quezon City Tuesday.
“Spot incentive will be applied for every kilometer exceeding 2 km. in booked trips. The extra 1 km. will be given as spot incentive,” Cu said.
Grab will offer subsidies out of its revenues and will not affect the fare that will be paid by riders.
“This will be placed as part of the entire incentives program. This is a new feature on the technology side. We want to ensure that drivers will not be operating on a loss. Our current profitability is not the question here. The question here is how we can improve our services,” Cu said.
The operating costs of Grab Philippines has increased to PHP4.57 billion last year from PHP2.45 billion in 2016 while its net losses amounted to PHP2.92 billion in 2017 compared to PHP1.56 billion in 2016.
The increase in Grab’s operating costs was attributed to revenues from the 20 percent commission from rides that are being used for driver incentives.
“We do not expect the situation to change in the next 12 to 18 months. We are still in investment mode and are not expecting to make money anytime sooner. But these losses are still within our budget forecast,” Cu said.
Grab earlier said it is seeking for the migration of about 6,000 drivers to its platform, who were displaced following the halt of Uber’s operations last April. It currently receives about 600,000 passenger booking requests daily but only 35,000 vehicles are available to serve the riding public.
The company also said that the suspension of the PHP2-per-minute charge by the Land Transportation Franchising and Regulatory Board has resulted in the reduction of the number of its drivers on the road. (Aerol John Pateña/PNA)
