LTFRB Reacts to Grab's Acquisition of Uber, And How the Deal May Not Push Through
After denying on both the regional and local front since the start of 2018 that Uber Technology, Inc. isn't selling its ride-sharing and transportation network business in the ASEAN region to rival Grab, news broke out recently that the rumor has been true along, with the former soon holding a 27.5-percent stake in the latter "which is reflective of the companies’ respective market shares."
"Grab is now backed by the world's two largest global ride-hailing companies (DiDi Chuxing and Uber), in addition to leading global investor SoftBank. All three companies have significant stakes in Grab and are committed to its continued success in Southeast Asia," Grab said in a statement.
Of course, with Grab's acquisition of Uber, the Land Transportation Franchising and Regulatory Board (LTFRB) reiterated that it will continue to regulate and monitor the fare structure "for the benefit of the riding public."
"We will be awaiting the manifestation to be filed by Uber in due time to address the issues pending before the LTFRB," said agency Board Member Atty. Aileen Lizada. "We will await the manifestation of Uber to be filed earlier or on the date of the hearing (April 3) as regards its positioning on all dealings with the LTFRB. Likewise, all incentives that have been emailed by Uber to their respective peers or partners yesterday (March 25) will be honored by Grab. As earlier discussed with Brian Cu (President) of Grab (Philippines), all pending cases of Uber with the LTFRB will still be handled by Uber."
The LTFRB though clarified that Grab's acquisition of Uber still has to pass one hurdle: the Philippine Competition Commission (PCC) as the anti-trust regulator has supposedly not yet been notified by either Transport Network Company (TNC).
Based on the Competition Act, the deal between both companies requires the clearance of the PCC to ensure that the new entity will not result in a monopoly or other unfair trade practices.
"If the parties meet the new threshold, now set at PBillion for Size of Transaction and P5B for Size of Party, they should notify the PCC within 30 days after (the) signing of their definitive agreement," said PCC Chairman Arsenio Balisacan in a statement.
Currently, the combined vehicle count of both Grab and Uber is at 59,020 units based on the LTFRB's audit. Furthermore, three companies are supposedly seeking accreditation as Transport Network Companies--Lag Go, Owto, and Hype--while two are applying as app-based ride-hailing taxis in Hima and Micab.