Grab Seeks P10-13 Fare Increase Amid Higher Excise Taxes

Ridesharing firm Grab is proposing a six to ten percent or Php10-13 increase on its fares because of higher excise taxes on petroleum products under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

The company is set to file a petition for the fare increase before the Land Transportation Franchising and Regulatory Board (LTFRB) within this week, according to Grab Philippines country head Brian Cu.

“The fare increase aims to cover the higher operating costs of our drivers due to the implementation of the TRAIN policy,” Cu explained in a press conference Wednesday.

A full-time Grab driver earns an average of Php3,200 to Php3,600 daily. Of the amount, Php800 to Php1,000 is spent on gas.

“Our biggest worry is the day-to-day operations with regards to the fuel that drivers need. If a fare adjustment is not made, this would (compromise) their income on a monthly basis,” Cu said.

Once the fare adjustments are granted by the LTFRB, Grab assures its riders that these will be implemented only when there are “significant changes” in oil prices.

The average fares of Grab passengers were pegged at Php150 to Php170 as of December 2017.

Under the TRAIN law, an initial excise tax of PHP2.50 per liter shall be imposed on diesel this year, which will eventually increase by 2020. An excise tax of Php7 will be imposed on gasoline in 2018, gradually increasing to Php10 in 2020.

The Department of Energy (DOE) has advised oil companies not to apply the new excise taxes on old stocks of petroleum products, as these are levied on importation and not at the point of sale to consumers.