Grab PH dispels 'possible TNVS oversupply' scenario 

Grab Philippines allayed fears that additional transport network vehicle service (TNVS) providers will lead to an oversupply.

Grab Philippines Senior Director for Operations Ronald Roda said that the new TNVS will only plug severe supply gaps and that an oversupply is highly unlikely.

He noted that the demand for fresh supply of TNVS in the country is enough, citing that commuters using ride-hailing apps have already breached the pre-pandemic level in December 2022.

Roda also said that in the Greater Metro Manila (GMM) area alone, Grab daily bookings alone far exceeds the existing supply of ride-hailing drivers. He said that the company served less than half of the passenger demand volume in December last year.

Roda also said that the demand for GrabCar outside GMM has not yet returned to pre-pandemic levels but has also reflected monthly double-digit growth.

“We estimate that the number of slots required for catering to demand in 2023 for new and existing cities is close to 100,000 TNVS licenses mentioned by the LTFRB in their last statement. For Greater Metro Manila, this simply brings us back to the 65,000 supply cap levels pre-pandemic. Our aspiration is to get GMM supply back to early 2020 supply levels,” Roda said.

“For the provinces, an estimate of 35,000 TNVS licenses are taken into consideration forecasts based on population size that can be converted into the Total Addressable Market (TAM), as well as the activity levels of the current driver pool in December 2022,” he added.

Further, he shared that back in pre-pandemic, the TNVS supply for GMM is at 65,000. Currently, there are only 20,000 Grab driver-partners that are actively plying within GMM roads.

Areas outside the Greater Metro Manila, including Pampanga, Albay, Camarines Sur, Iloilo City, Bacolod City, and Cebu, also need additional supply of TNVS.

“Even at 65,000 available cars in GMM, the fulfillment rate — the percentage of bookings that are fulfilled — never breached 85 percent pre-pandemic, meaning that there was still passenger demand to be fulfilled by the driver-partners,” Roda said.

In addition, Roda said that its current transport network vehicle service (TNVS) pool will not experience lowered revenue should there be additional driver-partners that will join.

Moreover, Grab is also expanding its services to more areas in the country, specifically in Mindanao, investing in other provinces to support the digital transformation goals of their local government units.

“The fresh allocation of TNVS supply is truly a welcome development. Grab has initiated discussions with the local governments of Davao, Cagayan de Oro, and Iligan to hopefully launch Grab’s super app services in their cities to enable their constituents to enjoy digital services. Historically, Grab noted strong contributions to the local economies of the cities where it operates, as it creates a domino effect on growth — from driver-partners, merchant-partners and down to the consumers,” Roda said.

Photos from Grab

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