Grab to LTFRB: 10k new TNVS slots a good start, but the industry needs at least 80k supply to serve the demand

Manila, Philippines — The Land Transportation Franchising and Regulatory Board should increase the TNVS common supply base in Metro Manila from 65,000 to 80,500 to be able to serve the current passenger demand.

LTFRB’s decision to open 10,000 new vehicle slots is a step in the right direction towards resolving the current lack of supply on the road but it’s not going to be enough. Replacing the inactive vehicles in the masterlist would be an additional measure that could go a long way in improving TNC service, Leo Gonzales, Grab Philippines’ Head of Public Affairs, said in a statement.

Ride-hailing services, like Grab, are a viable alternative for commuters facing the current mass transport challenges in Metro Manila. Unfortunately, the overall riding experience is constrained by the limited supply of TNVS vehicles.

“The Philippines, despite being the first Asian country to legalize ride-hailing in 2015, is facing a big setback with the current supply crisis. Supply is struggling to meet the massive demand from the riding public and only the LTFRB has the authority to address this. Grab gets about 600,000 daily bookings but there are only 35,000 daily active drivers available to serve this demand. None of the other countries in the region have a supply problem like this. In fact, Grab’s allocation rate in Metro Manila is the lowest in Southeast Asia as only 4 out of 10 bookings are able to be efficiently served.” Gonzales said.

Out of the proposed 65,000 vehicle cap, 55,000 slots have been allocated to vehicles the LTFRB masterlist created in February 2018. When Uber pulled out of the market last March, only 42,000 vehicles were left operating with Grab as not all vehicles were able to transfer from Uber. Considering coding and natural churn, only 35,000 vehicles are active daily. Currently, there are about 13,000 inactive vehicles in the system. Yet, the masterlist has not been revisited to reflect this new reality even though the LTFRB made earlier pronouncements that it will review the demand quarterly.

“We acknowledge and thank the LTFRB for taking the initiative to solve this industry issue. However, this is just a first step. More should be done to end the wait of passengers, drivers and other TNCs. We urgently request the LTFRB to replace inactive vehicles with active vehicles ready to serve the riding public. We also appeal to the LTFRB to increase the common supply base to 80k vehicles (equivalent to 65K active vehicles) and review the demand quarterly, consistent with their earlier pronouncements. This will help bring more passengers home and will allow new TNCs to scale,” Gonzales added.

Other transport network companies have entered the market and share the same pool of vehicles. Registered vehicles in the master list are allowed to drive for any TNC, and even more than one company.

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