(Eagle News) — The quality of services provided by Grab Philippines has declined after its parent company acquired the Southeast Asian business of Uber Technologies.
This is according to the Philippine Competition Commission, whose Mergers and Acquisitions office conducted a motu proprio review of the transaction.
In making the conclusion, the PCC noted that prior to the transaction, “prices charged by Grab have been flat to declining, while post-transaction prices have been increasing, despite the increased supply of drivers available to Grab post-Transaction.”
“This upward trend in price is apparent through the (i) higher fares, and (ii) increased frequency of surge-pricing applied by Grab,” the PCC said.
According to the agency, apart from the increased prices, there have been increased driver cancellation; forced cancellation of rides; and increased waiting times.
It said this was because of “the loss of a competitor in Uber where trips were less likely to be cancelled due to features which mask the destination of a prospective rider until the start of a trip.”
While there were new “entrants to the relevant market,” the PCC said that “historical data shows that it would take a significant amount of time and cost for these new players to grow a driver and rider base sufficient to contest the incumbent.”
In short, the PCC said “that new entrants in the relevant market are not likely to exert sufficient competitive pressure on Grab.”
“During such period, Grab will not be constrained by any competitor, allowing it to exercise its market power in the relevant market,” the PCC said.
