Investments, not losses.
Grab Philippines on Wednesday said it was ready to subsidize their drivers in response to passenger bookings that are kilometers away from the driver.
Grab had said the subsidy plan will be made in its effort to reduce the number of trip cancellation. It added that it does not consider the monetary losses as losses but as investments.
Cu claimed that Grab lost P4.5 billion in the last five years because its supposed net income have been used as incentives for drivers.
“We don’t see it as pure losses, we see it as an investment. We're still building the base of drivers and passengers to a level na puwede na kami mag-scale, wala pa po kasi kami sa economies of scale,” he said.
“Honestly mahihirapan po kami makamit ’yung economies of scale na ’yon kung panay cap ang hinaharap namin, on number of cars, on pricing. But in other market, we've proven naman that the business model works at may fast towards profitability, eventually, but right now, we’re happy to continue investing in the country,” he added.
“Investment mode pa rin naman po kami. Naniniwala naman kami sa future ng transport sa Pilipinas, nagtatayo lang kami ng [foundation], we spend money to erect the foundation.” Cu said in a radio interview.
Cu said that the subsidy will not be shouldered by the passengers.
“Paano po namin makukuha sa pasahero, fixed po ’yung fares natin sa pasahero? May limit po kung ano ang puwedeng i-charge sa pasahero, so impossible po na makuha namin sa pasahero.”
Meanwhile, the Land Transportation Franchising and Regulatory Board had refused to put back the P2 per minute charge, although Cu said the hearing on the issue is still ongoing.
The Grab exec said they already submitted a petition and a motion for reconsideration.
Cu also reiterated that the reported undeclared flag down rates, was authorized by no less than the Department of Transportation and Communications and its Order No. 2015-011.
The order authorizes TNCs to create their own fare structure with oversight from the LTFRB, but was changed when the Omnibus Franchising Guidelines were issued last year.
“No one talks about the Department Order, people refuse to acknowledge it but it was issued by the then DOTC,” Cu said.
Cu also accused LTFRB of allowing other TNCs to haveP2 per minute travel time charge.
At least two other new ride-sharing apps—Hype and HirNa, Cu have already been accredited by LTFRB.
Ang nakakapagtaka nga po is lahat naman ng ito ay nabigyan ng P2 per minute at in fact, ’yung per kilometer fares nila, mas mataas pa sa Grab,” Cu said.
“So if ang ugat po ng lahat ng mga issues namin sa Grab ay ’yung mataas na fare, bakit po pumayag ang LTFRB na mag-approve ng mga TNCs na mas mataas pa ang fare structure sa amin,” he asked.