PCC taps independent auditor for Grab compliance

MANILA, Philippines — The Philippine Competition Commission (PCC) has appointed Smith & Williamson to serve as the independent third party firm to track and audit for 12 months Grab Philippines’ compliance with the antitrust body’s commitment decision.

In a statement yesterday, PCC said Smith & Williamson emerged as the most suited firm to monitor Grab’s compliance with the voluntary commitments.

The British company, which has over 100 years experience as an audit firm and 13 years in reporting to competition authorities, has a track record in competition cases including the recent task monitoring of Grab and Uber on interim measures directions in Singapore.

PCC considered many candidates for appointment, including two nominees from Grab.

In selecting a third party monitor, PCC looked at knowledge in competition law, expertise, years in practice and familiarity with the relevant market, among others.

For the monitoring, Smith & Williamson will conduct an audit to make sure Grab complies with the undertakings detailed in the commitment decision issued by PCC on Aug.10.

PCC earlier approved Grab’s acquisition of Uber, subject to conditions on service quality and pricing standards which the ride-share app would have to comply with.

Under the commitment decision, Grab will commit to bring back market averages for acceptance and cancellation rates before the transaction, and the response time to rider complaints. This means there should be reduced cancellation rates and shorter waiting time for riders, among others.

In terms of the fare transparency commitment, Grab will revise its receipt to show the fare breakdown per trip to provide the distance, fare surges, discounts, promo reductions, and per-minute waiting charge if reinstated by the Land Transportation Franchising and Regulatory Board.

As part of the commitment decision, Grab’s prices should not have an “extraordinary deviation” from the minimum allowed fares and the ride-hail app will be penalized equivalent to five percent of its commissions, or up to P2 million, in the identified trips with extraordinary deviation without sufficient justification.

Grab will likewise remove the “See Destination” feature for drivers with low ride acceptance rate so drivers cannot decline passengers based on where they are headed.

In addition, the ride-hail app should not introduce policies that would result in drivers and operators providing services exclusively under the Grab platform or prevent incoming transportation network companies from tapping into Grab’s pool of drivers.

As incentives provided may result in drivers remaining exclusive to Grab and affect entry of competitors, PCC will monitor and evaluate the ride-hail app’s incentives on the basis of mandatory quarterly reports.

To improve its services, Grab will also enhance driver performance standards; adopt a Driver Code of Conduct; establish a Grab Driver Academy; adopt an emergency SOS feature, help center, and passenger no-show feature; adopt a Passenger Code of Conduct; maintain dedicated service lines subject to prevailing labor regulations; adopt a Driver Welfare Program; and implement a Driver Rewards Program under the commitment decision.

While the review would be for one year, PCC commissioner Stella Luz Quimbo said earlier, Grab could apply to be released from the commitments after six months, if it is able to show there is sufficient competition in the market.

Individuals are encouraged to report any violation or incident inconsistent with the commitments by sending an email to [email protected].

For its part, PCC would be vigilant towards any breach of the conditions that would subject Grab to fines of up to P2 million per breach, or unwinding of the transaction.

Penalties may also be imposed on any violation or arrangement to circumvent the commitments.

“It is one thing to pledge and another thing to carry out the voluntary commitments that bind Grab Philippines to address the competition concerns. Smith & Williamson as the independent monitoring group will serve as our eyes and ears on the ground. Their reports or recommendations will be evaluated but PCC will still ultimately determine any possible transgressions,” PCC chairman Arsenio Balisacan said.