Asia's top rideshare outfit, Grab, is late paying fines for running late
Took out Uber and promised to play nice, but regulator alleges years of evasion
The Philippine Competition Commission (PCC) has ordered Singapore-based Uber analog Grab to pay more than $160,000 in fines for failing to reimburse customers for slow service.
The amount adds to over $1 million of fines already imposed on Grab since 2018, when it bought its main rival in the region: Uber. The ride-hailing service, which has grown into a superapp, first launched in the Philippines 2013. After acquiring Uber, local authorities required it to meet certain undertakings about prices and other matters.
Grab was fined for failing to meet those requirements, fined again for failing to follow three PCC orders to reimburse customers, then fined again misleading the PCC that it had paid the sums to customers. The fines were issued over a three year period, with some going to the internet regulator and others to customers.
In addition to issuing the refunds, Grab was also ordered to implement an "Alternative Refund Mechanism" which would allow its customers to claim remaining refunds. It was also instructed to inform customers on various platforms about the pending reimbursement, which split a lump sum into fragments for each customer.
Grab told the PCC it had reimbursed customers, but this week PCC said it found the payments had not all been made. The regulator alleged that five months after the deadline for the commission's third and final refund order, fewer than 25 percent of Grab's customers in the Philippines had received a refund.
The PCC said Grab further dragged its feet on the refund order until it issued a show-cause order in January 2022. Miraculously, by April 2022, Grab had processed 73.8 percent of the refunds it had claimed in the compliance reports.
The Register understands Grab initially tried to offer Philippines-based customers vouchers – but the amount of those chits was trifling so users didn't redeem them.
Grab declined to disclose how many monthly users it had in the Philippines, and thus how many people would split the ordered reimbursement. However, in pre-COVID 2019, the company claimed average monthly rides had been growing by 150 percent annually.
In 2023, the company said it "urgently" needed more drivers as the country moves on from the pandemic, and offered significant bonuses to new drivers.
The Register also understands attempts to refund customers using Grab's own GrabPay payment scheme also proved less than successful, because not all Grab customers use Grab's e-wallet. In 2019, the biz claimed 25 percent of all Grab transactions in the Philippines were paid through GrabPay – the result of its use growing 30 percent every quarter.
Grab told The Register that it was "surprised" at both the regulator's recent imposition of a fine and its choice not to inform the firm of the decision first. It argued it had been "engaging with the PCC for over a year with proposals for alternative mechanisms to disburse the remaining administrative fees."
Grab chose to refer to the monies as "administrative fees" instead of PCC's preferred nomenclature of "reimbursement."
The superapp added it was "glad" the PCC had finally come to a decision on the disbursement mechanism and that it was fully committed to depleting the unclaimed admin fees and have made every efforts to distribute them.
- Asia's 'superapps' bundle ride-share, food delivery, even financial services – and they're beating big tech
- Asia's superapps follow another hot tech trend: mass layoffs
- Asia rules the mobile world: more users, more often, generating more cash
- Irony alert: Major airport to be interrupted for two hours to replace UPS
The PCC has been on Grab's case for potential market dominance ever since it acquired Uber. On Monday, the regulator reminded everyone it only approved the buyout on the condition Grab clean up some "competition concerns."
A few mostly qualitative voluntary commitments were inked at that time. Grab promised that drivers didn't have to be exclusive to its app, driver incentives would be public information presented on quarterly reports. It also promised to show fare breakdown, and to keep prices at levels comparable to those it charged when Uber was around.
However, a year into operation, the PCC said "the dominance of the merged firms remains unchallenged and competition has not improved in the ride-hailing market," and ordered new Grab to make new commitments.
The new commitments were more specific and included the removal of a "see destination feature" and a 70 percent completion rate of drives, so that drivers could not discriminate against riders.
Also included were limits to how much its average fare could increase. And if Grab breached its monthly average fare cap, it was ordered to return the excess commission to its riders through GrabPay accounts within 30 days.
Which leads the PCC and Grab to where they are today - in dispute, with no end in sight and the meter running. ®