Grab Philippines has explained their frequent surge pricing, even during the wee hours, by citing the classic law of supply and demand.
Booey Bonifacio, Grab Philippines director for public affairs, highlighted the disparity between the number of TNVS drivers (40,000-45,000) and the number of passengers (up to 1 million) during the day.
"We're always in a situation where demand is higher than supply," Bonifacio explained in a TeleRadyo Serbisyo interview. "Based on economic principles, surge pricing is inevitable."
She further clarified that surge pricing can occur even in the predawn hours due to a shortage of drivers.
"If, for example, many BPO employees try to book rides at the same time and there are few drivers available, surge pricing will happen, even at 3 AM," she said.
Bonifacio emphasized that the majority of the surge pricing goes directly to the drivers as an incentive, acknowledging their willingness to work during peak hours, traffic, or early mornings.
However, a report by the Philippine Center for Investigative Journalism (PCIJ) revealed that GrabCar rides consistently include surge fees, calculated by an algorithm to attract more drivers. Despite these higher fares, PCIJ data suggests that customers still often face long wait times.
This raises questions about the effectiveness of surge pricing in addressing the supply-demand imbalance and whether it truly benefits both drivers and passengers.
