MANILA — The app of ridesharing firm Uber will continue to be active until April 15 as Grab Philippines has agreed to subsidize its costs.
Grab Philippines said it will comply with the order of the Philippine Competition Commission (PCC) to maintain the independent business operations of Uber and Grab for the duration of its motu propio review of the acquisition of Uber’s Southeast Asia operations.
“With respect to the interim measures imposed by the Commission, the Commission has required the parties to maintain independent business operations and separate operation of the ride-hailing platforms, which means that the Uber app should be kept open, throughout the review period, but left it to the parties to agree on cost allocation. Grab believes that this measure increases the transaction costs of the parties, contrary to the spirit and rationale of interim measures. Grab intends to discuss this matter with the PCC,” Grab Philippines Country Head Brian Cu said in a statement Monday.
“Considering that Uber has exited the region on 25 March and clearly stated during the public hearing its incapacity to fund the operations in the Philippines, the parties have agreed to keep the Uber app operational with Grab bearing the costs, to give drivers and consumers time to adjust to Uber’s departure. In the spirit of cooperating with the PCC, Grab has also agreed to continue to bear the costs of the Uber app extension (from March 25 to April 8) until April 15, 2018. Our understanding from the PCC is that this interim arrangement, which was fully explained to the PCC, is not a breach of its Order,” Cu added.
Grab also said that although the Uber app will be able to operate, it has already limited functionality and support.
Uber has disclosed that it no longer has the funds and manpower to continue its operations.
“Grab noted that the LTFRB (Land Transportation Franchising and Regulatory Board) has expressed concerns pertaining to customer support and safety issues arising from Uber’s limited operations. Grab wishes to stress that this interim arrangement is only for the purposes of satisfying what the PCC appears to require until Grab is able to discuss with the PCC,” Cu said.
Grab will seek for a dialogue with the PCC to present its views on the impact of the interim measure on its business operation.
Grab’s app continues to operate as Uber drivers migrate to their platform. It will continue to provide support to accredited transportation network vehicle services (TNVS) drivers who wants to become a part of its system.
Grab earlier said that Uber’s Southeast Asia operations will continue only until April 8 after acquiring its ride-sharing and food delivery businesses last March 26.
The PCC has formulated various interim measures that would ensure the credibility and integrity of its review on the merger of Uber and Grab for possible anti-competition concerns.
Among these include maintaining the independence of their business operations; refraining from sharing confidential information, such as pricing and operations; and refraining from imposing exclusivity clauses. Both Uber and Grab were also asked to refrain from performing any practice that could lead to reduced viability of their businesses and prejudice the PCC’s power to review the transaction and impose remedies.
The PCC is conducting its review to determine how the acquisition of Uber would affect the ride-sharing market, as well as its impact on the thousands of its partner drivers who could be displaced. (PNA)
