Since ride-hailing operator Uber Technologies informed their customers last year, April 2018, that its app will shut down in the Philippines giving disgruntled riders the option instead to download the Grab app and register in order to book rides, The erstwhile competitor has been enjoying monopoly status here as in many Southeast Asian countries. This loss of competition, predictably, resulted in fewer choices, higher fares, and generally poorer service for Filipino commuters.
Grab and Uber announced their merger in March 26, 2018 and integrated in other markets such as Malaysia, Indonesia and Thailand on April 8. After the US ridesharing technology firm sold its Southeast Asia operations to Grab, commuters have been left with even less options for transportation in Manila and other Philippine cities that to begin are already challenged for efficient mass transport.
Meanwhile, the Land Transportation Franchising and Regulatory Board (LTFRB) accredited six more transport network companies but almost six months later, these new firms have yet to make a difference in the market as they navigate the realities of breaking the “virtual monopoly” in the ride-hailing industry.
In a bid to “break the monopoly,” the Land Transportation Franchising and Regulatory Board (LTFRB) accredited six new transport network companies (TNCs) including MiCab in April; and ePickMeUp in June. All from last year. They were set to challenge Grab’s dominance in the ride-hailing industry, as drivers, too, had more choices on companies to link up with. But the companies are faced with problems that keep them from making a difference in the market, ranging from capital investments to recruiting drivers and getting riders. MiCab’s key advantage is its specific focus on the taxi industry. In a way, it is improving its service quality, as there has always been a negative commuter perception of taxis.
Smaller companies want some form of protection from the LTFRB so they can stand up to better-funded competitors and give commuters more choices. There exists a Philippine Competition Act (Republic Act No. 10667) intended to ensure efficient and fair market competition among businesses engaged in trade, industry, and all commercial economic activities. It prohibits anti-competitive agreements, abuses of dominant positions, and mergers and acquisitions that limit, prevent, and restrict competition.
Although the market is “disputable,” Grab faces no real competition right now.
MiCab, which first operated in Cebu and Iloilo, is a taxi-hailing app with none of the other TNC’s dynamic pricing. MiCab doesn’t work with private drivers. ‘They work with taxis. They offer the same services, the same convenience and the exact same safety and comfort. Micab is clearly responding to the challenge, offering a better and friendlier, if simpler alternative.
The key difference is Micab has low booking fees and absolutely no price surges referring to the fares of the leading transport network company doubling when demands are high or any reason ranging from app usage, road conditions and traffic. What they do for revenue is they offer advertising banners on their taxis. With that being said, their fees follow the government approved fare structure for taxi cabs in the country.
Competition is innovation.
Competition benefits both entrepreneurs and customers. It provides a wider avenue of choices. It forces businesses to rethink their business model and strategy that further advances the interests of both. Competition forces everyone to figure out how to be different than your competition, how this can focus on customers. In the long-term, competition will help you build a better business
Competition is always a good thing. It forces us to do our best. As necessity is the mother of invention, competition is the mother of innovation.