Ride-sharing Services Ordered to Cap Their Prices

December 28, 2016

If you’ve been getting around via ride-sharing services like Grab and Uber lately, chances are, you’ve experienced a bit of bill shock. We refer to the seemingly ever-increasing fares they’ve been charging to consumers, especially during rush hour. If you’re feeling the pinch, then here is a bit of good news.

The Land Transportation Franchising and Regulatory Board (LTFRB) has issued a government directive that aims to alleviate the said concern. The directive involves the LTFRB ordering the two ride-sharing companies to have a “maximum allowable price surge on their fares to be twice the rates for time covered and distances travelled excluding the base fare”. In other words, there is now a price cap on how much Grab and Uber can charge their customers. Moreover, the agreement also directed Grab to lower its per kilometer fares to P10-14/km, from the older P12-16.

For its part, the government was also prompted to hasten the granting of franchises for Transport Network Vehicle Services (TNVS)—or those folks who can own and operate an Uber or Grab car. If you recall, Uber came up with an explanation of surge pricing, which essentially depends on the law of supply and demand. Thanks to the suspension of TNVS permits last July, along with the increased demand ofr Grab and Uber during the holiday rush, ride fares would inevitably go up.

With the new directive, it is hoped that everyone will be appeased and have a safe way of getting around in the coming New Year.


About the Author

Mr. Gerard Jude Castillo
Gerard has been a self-confessed car nut ever since he was a little boy. As a grown-up, he indulges in his passion by collecting toy cars (which he started since childhood) and reading up on the latest cars out there.  As Associate Editor, he will ensure that you get your fill of the latest cars in the market, as well as a load of automotive features.