The space resembled a typical “tambayan.” Equipped with a wall fan, and a water and a charging station, it was enough for the weary riders to rest and recharge before the “merienda” and dinner orders trickled in.

A former security guard, a factory worker, and a barangay employee were all brought there together by an app. Every day, they crisscrossed the bustling city, waited at their designated spots in restaurants and cafes, and brought food to customers right at their doorstep.

Rico (not his real name) joined GrabFood in 2019. The platform gave him a way out of his rigid and gruelling job as a bank security guard. (GrabFood is one of the more popular food delivery services in the Philippines and among those offered by the superapp Grab.)

Melinda (also not her real name) joined the platform, which gave her the flexibility she needed as a mother of two aside from its promise of better pay.

Another rider, Lara, was doing OK with her job in a barangay, but she got enticed when Grab came in. The idea of not having a boss was undeniably appealing to her.

Having no boss, the freedom to choose working hours, and the promise of a higher income have drawn Rico, Melinda, Lara and many more Filipinos to the growing gig economy.

The term “gig” used to refer to a band’s performance typically scheduled after work hours or on a weekend. Now it has expanded to a wide variety of tasks, often done through digital platforms 24/7.

Gig work is driven by a confluence of several factors. Customers—those who can afford—increasingly want convenience and services on-demand. Workers are seeking alternatives from the traditional 9-to-5 job. Companies aim to cut costs.

Digital platforms have bridged all these needs. They capitalize on this trend by connecting merchants like restaurants and cafes to customers. In between are the so-called gig workers.

In the gig economy, workers carry out task-oriented and time-bound delivery services without signing long-term contracts. This allows them to choose when and where to work, making it an ideal side hustle for those with regular jobs.

From October 2023 to June 2024, the Philippine Center for Investigative Journalism (PCIJ) interviewed dozens of workers for this report. The benefits are indeed undeniable for riders and drivers who treat this kind of work as a sideline to earn extra income in their spare time. But for many Filipinos, gig work is not simply a “raket”—it has become their main source of income.

This is a big deal especially when unemployment and underemployment persist. But because tech-driven services have far outpaced existing rules and regulations, workers are often disadvantaged.

Food-delivery and ride-hailing workers in the Philippines, whose daily routine is dictated by an algorithm, struggle with uncertain pay, indebtedness, and the physical toll of chasing incentives.

The risks of gamification

Lara, the former barangay worker, earned more than P1,500 the day before she was interviewed by PCIJ. For the 22 deliveries she made that day, she earned P1,372, plus P200 in incentives for making a certain number of trips, and a P20 tip, for a total of P1,592.

The minimum daily wage in Metro Manila was P610 at the time. At first, it would seem that Lara earns a lot, but after all expenses—gas, food, maintenance, etc.—her take-home pay could be lower.

In cases where they do earn more than the minimum wage, the riders complain about the gruelling 12-15 hours they had to hurdle.

For customers, it might seem as simple as thinking about what we want for lunch, opening the app, searching for a restaurant, choosing from the menu, and in a few minutes, a rider will be assigned to get your food for you. But there’s a lot more going on behind the scenes than we realize.

At the heart of these apps are algorithms that suggest merchants to customers, assign riders and drivers to passengers, and compute fares and incentives. This innovation makes things efficient and convenient for everybody. But it’s also intended to make money.

Our research shows that platforms like GrabCar, GrabFood, MoveIT, Joyride, and Angkas implement various incentive schemes designed to encourage workers to complete more orders and bookings every day. These incentives are offered on top of their standard pay, functioning as “bonuses” awarded to workers who meet specific delivery or ride targets—much like a game.

And because companies can restructure or reduce fares or for example, more recently, deduct the senior citizen and person with disability discounts from the workers’ pay, many workers really go for the app’s incentive program.

The implications are potentially serious. It could pose health risks and occupational danger to the workers and by extension, customers.

These incentive programs may also discourage workers from “multi-homing” or the practice of working on different platforms, which further limits their flexibility and earning potential.

Out-of-town drivers

Arnold (not his real name) spent two decades as an overseas Filipino worker. Now, he drives a GrabCar. The car is owned by his sibling to whom he remits a P1,000 “boundary” (a quota fee) daily.

Arnold is from Batangas, a province south of Manila. To save on costs and complete as many trips as he can, he sleeps in his car and goes home to the province only during Wednesdays, his coding day. There are others like him who by now already know most of Metro Manila by heart and the places where they can park their car and not get towed, take a bath, and rest.

Arnold says he is looking for a place to rent. The problem however is finding parking space too.

“Kasi mahirap naman tutulog ka nang sarap na sarap ‘yung tulog mo. Hindi na sasakyan naman eh, iiwan mo lang kung saan, ah, hindi safe. Para hindi ka rin makatulog ng, ano, hindi kagaya dito, kahit na, dito na, tulog sa kalsada,” he said.

Because he practically lives in his car, he gets to drive whenever he can. Admittedly, sleep is far from comfortable.

Arnold is able to reach his target income, including the P1,000 boundary a day. Not all drivers own their vehicle. Many drive other people’s cars and remit a boundary at the end of the day. Another setup is called “boundary-hulog” where a driver pays both boundary and “hulog” for the car so they get to own it after a few years.

Silver, gold, platinum

With GrabCar, drivers can reach higher tiers—silver, gold, or platinum—based on the number of rides they complete. The higher the tier, the lower the “kaltas” or the commission Grab deducts from their earnings, with the standard rate being 21%.

A driver needs to make 450 rides a month to reach platinum, the highest tier; 400 for gold, and 250 for silver.

Food delivery has a similar incentive scheme. In rider parlance, they call it “butas.” On their phone screens, there are round icons that can be unlocked by earning gems. One ride earns 10 gems. The more rides they take, the more gems, the higher the incentive.

In 2019, the riders interviewed said they could easily earn P800 in incentives a day. But Grab has changed this scheme several times. The same number of rides would earn them a lower amount now.

Riders also try to reach a higher tier to earn other rewards such as insurance, which at the time of the interview, was provided to those who have gold and platinum status. Similar to GrabCar, workers first enter as members, and can then move up to the silver, gold, and platinum tier. To reach platinum, a rider must make 480 rides in one month.

“Mangyayari hindi ka na matutulog kasi isang buwan, 480 rides,” Rico said.

“Ako po sa personal, ilang beses ko po naranasan na tumatakbo po ako, minsan hindi, nakaidlip, nasa gutter na po ako,” Carlos said.

“Saka minsan, minsan nga, pag nagbibiyahe ko, naka-pikit lang ako yun,” Lara said.

“Pinipilit na bumiyahe para mahabol yung… target na incentives. Yung gems,” Rico said.

Now, the riders said this number is hard to reach especially if they serve an area outside the most busy cities like Makati, for instance.

Grab: ‘Safety first’; Joyride, Angkas: mum on issue

PCIJ reached out to Grab about the incentive program. We asked how the company ensures that the app’s algorithm does not cause harm or encourage behavior that might pose risks to its workers.

Grab said it has always prioritized passenger safety.

“… we have implemented several measures to safeguard our drivers and passengers. Our platform includes features that monitor driver activity and prompt breaks if prolonged driving hours are detected. Safety features are part of our commitment to preventing fatigue-related incidents,” Grab said in writing.

Grab also said that it “continuously assesses and evaluates the safety records of our drivers to ensure that only drivers with excellent driver safety records are allowed to service commuters.”

PCIJ also asked the company if it has tested these kinds of incentive programs and their potential impact on workers before implementing them. For instance, does the company track the number of hours workers spend on the road?

According to the response: “Our incentive programs are designed with the well-being of our driver-partners in mind. We regularly review and refine these programs to ensure they promote safe and sustainable driving practices. While specific operational details are confidential, we assure you that our policies are aligned with the industry’s best practices and regulatory requirements.”

Angkas had initially entertained our request for an interview but did not grant one eventually.

Joyride has not responded to a similar request as of press time.

Fairwork Philippines findings

A 2023 study published by Fairwork Philippines, a project led by the De La Salle University with the Ateneo de Manila University, University of the Philippines Diliman, and partners from the University of Oxford, reflects PCIJ’s findings.

The report evaluated Angkas, Borzo, GrabCar, Grab Food and Grab Express, FoodPanda, Joyride, Joyride Car, Lalamove, Maxim, and TokTok, and how these platforms meet the five principles of “fair work.”

The five principles of “fair work,” composed of fair pay, fair conditions, fair contracts, fair management and fair representation, were developed through an extensive literature review of published research on job quality and meetings at UNCTAD and the International Labor Organization and in-country meetings with local stakeholders.

The table below shows what each principle corresponds to. A platform is awarded a first point if evidence suggests that it does meet the condition. The second point under each principle can only be awarded if the first point for that principle has been awarded. If there is no verifiable evidence available that meets a given threshold, the platform is not awarded that point. A platform can score a maximum of 10 points.

Only GrabCar, Grab Express, GrabFood, Lalamove, and Angkas managed to earn points but even these are too few for the workers in these companies to be considered as receiving fair work.

While these platforms offer workers the opportunity to secure their families’ needs in the context of poor employment alternatives in the country, they face “multiple occupational health and safety risks” daily on the road, along with shortcomings in terms of basic safety protections from accidents, illnesses and death, the report found.

Similar to our research, Fairwork Philippines found that “(g)ig workers tend to stretch their working hours to secure more gigs to earn what they need to remain afloat amid fluctuant rates, opaque pay structures, rigid ratings, and increasing competition.”

In addition, the report emphasized that workers are compelled to do this not only as a “free” choice, but also due to unfair or predatory pay and incentive structures. “The lack of measures to protect workers’ safety heightens their vulnerability, and the absence of safety nets implies that any sudden inability to work redounds to livelihood insecurity,” the report said.

Inherent ‘asymmetries’

According to a Philippine Institute for Development Studies (PIDS) research, the problems encountered by the riders and drivers are caused by “asymmetries” inherent in many apps or platforms.

These asymmetries give rise to “structural inequalities,” where companies—like Grab, Angkas, Joyride, and FoodPanda—benefit the most. Followed by merchants—like our go-to restaurants and cafes—and then, us, the customers.

At the bottom would be workers, who also grapple with having the least information and understanding about how things work on the platform such as how fares are calculated, why they are getting pick-ups that are too far, how to contest low ratings, resolve disputes, address account suspension and termination.

Read more: Displacement, commute woes plague communities near delayed MRT-7 project

The post When apps are gamified, workers rarely win appeared first on CoverStory.

“I don’t want my son to go through all those because it saps his energy or sours his mood. He should be in high spirits and excited for school, but because of the commute, he might not look forward to studying anymore,” the mother of two said in a mix of English and Filipino.

Torres took taxis from time to time, but she often avoided them because of drivers known for gouging passengers with high fares. “Hangga’t maaari, Grab ‘yung kinukuha namin (Whenever possible, we always take Grab),” she said.

The Torreses’ experience is a common example of what it’s like to navigate Metro Manila. Notorious for its poor public transportation, the metropolitan region composed of 16 cities and a lone municipality had the world’s worst metro traffic in 2023. 

A traffic index found that a motorist spent 240 hours driving on average last year, with almost half of that time stuck on the road. So, when ride-hailing firms like Uber and Grab entered the Philippines, they thrived. The service they offered simply made sense for commuters like the Torreses.

But the family’s travel routine wasn’t sustainable. While their home is only seven kilometers away from school, booking a GrabCar ride meant leaving very early to avoid rush hour. They also spent at least P600 a day on the app alone. That’s roughly the minimum daily wage in Metro Manila.

Torres said she used to pay Grab about P270 going to school and roughly P290 going home at the start of the school year. A few months later, she noticed the fares rising to P310 and to as high as P350. She couldn’t understand the increase when she and her son took the same route every day. 

At one point, Torres got curious. She checked the receipt sent by the Grab app to her email, but she had no way to verify the amount.

“I didn’t have any basis or a reference to compare the fare, whether it could still go down or if there’s anything I could contest, so I just let it be. Besides, I didn’t really have another choice. I would take it (Grab) anyway,” she said.

For years, Grab’s seemingly steep fares driven by surge pricing have become a common commuter woe. Because no other firm has been able to threaten Grab’s dominance in the four-wheel transport network vehicle service (TNVS) market, customers are often left without other options. As of April 2024, there are 23,000 TNVS units, and the majority of those are Grab’s.

Behind Grab’s multibillion-dollar business is its data and algorithm-based approach to matching drivers and customers. This is how it is supposed to work, according to Grab: “When demand outpaces supply, the higher fares help to signal for more driver-partners to turn on their apps and join the flow.”

The idea makes sense. After all, Grab offers a service that isn’t the same as those offered by taxis, for instance. But the lack of transparency on how its algorithm defines surge rates has left many customers like Torres baffled.

An algorithm is a sequence of rules performed to carry out a certain task. It generates an output from a given input, similar to solving a mathematical problem or cooking a meal through a recipe. However, there is little people know about how these algorithms really work. This is why they are often called “black boxes.” 

While the inputs and outputs of an algorithm are often known, the process that turns the input into output is unknown. In the case of Grab, the firm uses driver and customer data to derive the surge rate. But how it computes those rates is unclear.

To test and learn more about how this algorithm works, PCIJ collected Grab’s pricing information by attempting to book rides for 10 routes across Metro Manila nearly every hour from 6 a.m. to midnight for one week. PCIJ also obtained data from Grab’s Farefeed application programming interface (API) every 15 minutes every day for the same routes during the same period.

Our investigation revealed that GrabCar rides always included surge fees, and when fares were high, waiting times did not always become shorter. The data suggested that the algorithm behind surge pricing did not always work the way Grab had advertised it to work. Customers still often had long wait times even when surge rates applied. 

Since its founding in 2012 by Harvard Business School graduates Anthony Tan and Tan Hooi Ling, Singapore-based Grab has become a multinational company. Originally designed as a ride-hailing app, Grab has since expanded into a “super app” offering food delivery and mobile wallet services. In the Philippines, Grab’s local subsidiary is MyTaxi PH, a homage to the app’s original name, “MyTeksi.”

Pricing probe still pending

Lawyer Ariel Inton was not surprised by PCIJ’s findings. It reflected the same complaints that his organization, the Lawyers for Commuter Safety and Protection, has been receiving. 

In 2022, the lawyers’ group raised questions about Grab’s surge fees along with other pricing concerns to the Land Transportation and Franchising Regulatory Board (LTFRB), the government agency that regulates public transport utilities. They wanted to know how Grab’s surge rates were determined.

There is still no information about how the LTFRB will resolve the questions about surge pricing. PCIJ’s interview and records requests with the agency have not been granted as of posting time. LTFRB only acknowledged our letter.

Inton said his group filed a motion to resolve the matter in January. There has been no news since.

“Two Christmases passed by already and there’s still no decision… We want to know when the surge [charges] should be implemented. Our focus then was that Grab supposedly applied surge charges because of supply and demand. But is it true every minute of the day? What we’re telling the LTFRB was for them to define surge. There has to be a limitation,” Inton said.

Ronald Gustilo, spokesperson of advocacy group Digital Pinoys, said he didn’t think the LTFRB was able to check how the Grab algorithm worked because of the fact that a complaint about it had been filed. 

“The fact that they are not addressing the complaint only shows that they don’t really know how or when surge pricing should be activated. Grab always says it depends on supply and demand, but in the first place, how do we know if there are indeed fewer drivers,” he said. 

In a written reply to PCIJ, Grab’s Philippine operations said it had “fully cooperated with the LTFRB’s inquiry” by participating in the hearings. “We remain committed to working with the LTFRB and other regulatory bodies to ensure our pricing mechanisms are fair, transparent, and compliant with all regulations,” the response stated.

Grab said it “strictly follows the fare matrix” set by the LTFRB, which includes provisions for surge pricing. The company also claimed that fares were shown upfront on the app “to provide transparency and allow for informed choices.”

The infographic below shows the information provided by Grab upon booking and when the ride is completed. The cost given by the app can indeed be broken down using the government-approved fare matrix, but only up to a point. 

Like other modes of public transportation, Grab’s fare is a combination of the base fare (P45) and increments based on distance (P15 per kilometer) and duration (P2 per minute). But unlike jeepneys, buses, and taxis, the company applies “surge pricing” that is supposed to be based on supply and demand. This part is opaque.

Grab had applied surge rates even before the guidelines for TNVS were drawn up, said Inton, who used to serve as board member of the LTFRB. When the LTFRB stepped in, surge pricing was retained in addition to the standard base fare and distance and duration rates. The LTFRB approved a surge that could only be up to twice the cost per kilometer and per minute.

Data: Grab rides always include surge fees

PCIJ’s data gathering yielded 1,328 data points from the Grab app and 6,720 through Grab’s fare check API. While our collection represented a small portion of the ride-hailing firm’s data, it offered useful insights into the inner workings of its algorithm.

Across all the rides we tried to book that week in February, data showed that surge charges were always included in the fares. Following Grab’s explanation, this suggested that booking requests always exceeded available cars nearly throughout the entire day—even early in the morning and late in the evening, even on weekdays and weekends. But it’s difficult to find out if demand did outpace supply because only Grab has access to this data.

According to data obtained from the app, the surge multiplier averaged at 1.51 times taking into account the rates for distance and duration of all the rides we had attempted to book. The rate tended to be in the lower range for a few hours in the morning.

The lowest surge multiplier we found was 1.19 times and the highest, 1.98 times, or almost twice the per-kilometer and per-minute cost. This is the maximum surge rate allowed by the LTFRB.

A Flourish heatmap

The surge charges customers paid for trips significantly differed depending on where they got picked up, the data showed. Passengers from Makati, Taguig, Las Piñas City, and Pasig paid higher surge rates on average. Meanwhile, lower multipliers were recorded in pick-up locations in Manila, Parañaque, Pasay, and Valenzuela.

For example, a six-kilometer ride from Makati to Taguig on Feb. 17, 2024 at 5 p.m. cost P381. Without a surge, the ride should cost about P215. The estimated surge rate was P166 or 1.98 times the distance and duration fees. ​​The surge fees on this day ranged from 29% to 44% of the whole fare.

Roughly the same trip distance within Valenzuela on the same date and time incurred a P64 surge fee. This was 1.5 times of the per-kilometer and per-minute cost. Grab charged P239 on the app. The surge fees on this day ranged between 23% and 31% of the entire fare.

A Flourish table

Verifying app fares with API data

As a way to verify, we compared the data collected manually from the Grab app with the data collected via Grab’s fare check API. The online tool as shown below provided estimates of the minimum and maximum fare and the duration of the trip.

When compared, the app fares were consistently above the minimum fare approximated by Grab in its own fare check page. This supports the finding that the rides PCIJ tried to book on the app always incurred surge fees. Moreover, it tended to be on the high side. 

The chart below shows that each booking (see black line) was also close to or more than the maximum fare estimated by Grab across the 10 routes.

A Flourish chart

API data: No surge?

Based on data collected from Grab’s fare check API, the company tagged each ride as “high surge,” “low surge,” or “none.” The same notices are not shown on the app, although it sometimes prompts customers to “beat high fares by booking later.”

Nearly two in three rides had a “None” surge notice in the API data, while the remaining rides were mostly “high surge” with a few “low surge”. This was inconsistent with what we found on the app where the surge fees were always added. Based on our data, there was always an extra amount charged on top of the P45 base fare, P15 per kilometer, and P2 per minute costs set by the LTFRB.

Curiously, the Makati-Taguig route in the API data registered a “high surge” throughout the week 24/7, every hour, even past midnight of the research period.

Grab did not directly address PCIJ’s question on why there was always a surge, but it did say that surge pricing was not predetermined by time but by real-time conditions.

“The discrepancy in surge notice(s) may result from variations in demand and supply at specific times and locations. The ‘High,’ ‘Low,’ or ‘None’ indicators are dynamic and can change rapidly as the system continuously processes new data to maintain balance and efficiency,” Grab said.

Grab added that its algorithm took into account a variety of factors, including traffic congestion, geographic location, the supply of drivers, and demand for rides.

“It operates dynamically to ensure that fare adjustments reflect the real-time market conditions. Surge is not manually set, but run by a real-time algorithm,” Grab wrote.

Gustilo, for his part, said that because algorithms are programmed by people, they need to be checked. Decisions driving their design will affect those who use the technology, he said.

Like Inton, Gustilo has been on the receiving end of complaints from both customers and drivers using the app. He himself found surge pricing puzzling as he had done his own fare monitoring. One time he checked the rate from his location to a destination hourly, from 5 a.m. until midnight. The data he collected showed that prices did not change much throughout the day, which led him to think that either no surge pricing was in effect or there was always a surge the whole day. 

“My point is, is Grab always on surge all day? Which is the same question asked by many passengers. Kasi nga, sobrang mahal na mag-Grab ngayon e (Taking a Grab now is so expensive.) Grab’s justification with surge pricing is demand. But drivers tell me, ‘Matumal ‘yung biyahe.’ So how do you reconcile that?” he said.

Does surge pricing get more cars on the road?

According to Grab Philippines, surge pricing is “an industry-accepted, sophisticated and scientifically developed algorithm-based feature driven by real-time supply and demand dynamics.”

“It ensures optimal allocation of resources by incentivizing more driver-partners to meet high demand, thereby enhancing service reliability. This mechanism is similar to economic principles applied in various sectors to balance supply and demand effectively,” the firm added.

If the algorithm was working as Grab had advertised, wait times should stay the same or become shorter when surge pricing took effect. However, relatively high surge multipliers lasted several hours without reducing wait times, the API data showed. This was not helpful for commuters because to realize a significant drop in the fare, they would have to wait much longer. 

For example, on Feb. 20, 2024 (a Tuesday) from midnight to 11:45 p.m., the Makati to Taguig City route recorded a notice of “High Surge” the whole day. The estimated average wait time was 3.4 minutes that day. It peaked at 11 minutes at 7:45 a.m., but didn’t go back to the average until 10 a.m. From 3:15 p.m. to 9:45 p.m. on the same day, the wait time averaged at four minutes. It wasn’t until past 10 p.m. when wait times generally dropped to a minute or two.

A Flourish table

Statistical analyses conducted by PCIJ did not yield conclusive results. The routes exhibited both positive and negative correlation between surge rates and wait times, which suggested that surge pricing did not always work to improve service quality, measured roughly as a reduction in wait time.

The routes that resulted in a positive correlation were pick-up points in the central business districts like Makati and Taguig. The surge rate and wait times in these areas tended to go in the same direction. It could be inferred that customers in these cities ended up waiting for a long time even with surge pricing.

Meanwhile, some routes did result in a negative correlation, meaning higher fares could be associated with shorter wait times. However, they were not substantial, which could mean that surge pricing had a minimal effect.

Grab acknowledges PCIJ finding

Sought for an explanation, Grab confirmed that surge rates could become “prolonged.”

“In some cases, high demand periods may persist, leading to prolonged surge pricing. The aim is to attract more drivers to areas with high demand, thereby reducing wait times over time. Continuous adjustments are made to ensure optimal service delivery,” Grab wrote in its response.

The firm said surge pricing was designed to address supply-demand imbalances but was not a static solution. The duration and impact of surge pricing depended on factors such as driver availability, demand surges in specific locations, and traffic congestion, it said.

On May 28, 2024, about a week after PCIJ wrote to Grab, the ride-hailing company was reported as asking the government to increase the number of TNVS vehicles in Metro Manila back to the pre-pandemic level of 65,000 to keep up with growing demand.

“Grab is struggling to serve the ride-hailing demand in Metro Manila, lamenting that TNVS supply is short of the pre-pandemic high of 65,000. The TNVS supply is around 40,000 slots as of end-2023,” PhilStar.com reported.

Persistently long wait times could also mean that drivers were not encouraged by surge pricing. At least a dozen drivers interviewed by PCIJ said that they didn’t necessarily go to “surge” areas or the areas marked red on the app map because that would mean getting stuck in traffic. 

They simply relied on the “bato” or the booking provided by the app, the drivers said. They spoke to PCIJ on condition of anonymity for fear of retribution.

Unchecked algorithms

PCIJ reached out to four relevant government agencies to learn more about how algorithms are regulated. Of the four departments, only the Department of Information and Communications Technology (DICT) and the Philippine Competition Commission (PCC) responded.

PCIJ has sent several requests and made follow-ups to the LTFRB since November 2023. The letters were acknowledged but not addressed. We wanted to ask the transport regulator about the status of its surge pricing inquiry and other related regulatory concerns.

The Department of Trade and Industry’s Consumer Protection Group asked for and was given a list of interview questions but did not respond to our request.

Only the DICT agreed to an interview. Assistant Secretary Philip Varilla said the department did not have a regulatory framework for ride-hailing applications. Its focus is on information shared by customers, he said. 

“Our attached agency, the National Privacy Commission, does some Privacy Impact Assessment. Basically, it is in relation to personally identifiable information. And with cybersecurity, we have our Cybersecurity Bureau, and they follow our Cybercrime Prevention Act, the National Cybersecurity Plan, as well as the Consumer Act of the Philippines to protect consumers. So, as for a regulatory framework specifically for ride-hailing applications, we don’t have one,” he said.

Making algorithms accountable

In the absence of regulations about algorithms, risks abound, according to experts. 

Dominic Ligot, co-founder of social impact technology company CirroLytix, said that while the Data Privacy Act and the Cybercrime Law cover abuses using technology or abuses on data, they do not cover algorithmic bias or algorithmic abuse. New laws are needed to cover algorithmic liabilities, he said.

Apart from legislation, designing an Algorithmic Impact Assessment or AIA might be helpful, Ligot said. It’s similar to the Privacy Impact Assessment under the Data Privacy Act. PIAs are a checklist of data being gathered, how they are processed, and who’s going to be accountable when there’s a data breach, for example.

An AIA can be a checklist that includes risks posed by an algorithm, among others, Ligot said. 

“Let’s spell it out. And then if we’re comfortable with the risk, sign, so that later if it blows up, ‘Okay, wait, who assessed this? And then we learn.’ At the bare minimum, we should have something like that for accountability and transparency,” he said.

This problem is not unique to Grab. Ride-hailing companies in other countries, like Uber, have been criticized for using surge or dynamic pricing to make a profit instead of managing supply and demand. 

Researchers have warned against algorithmic abuse in cases where companies raise surge rates more frequently than required due to weak regulation or the lack thereof. 

The Organization for Economic Co-operation and Development (OECD) for instance has highlighted concerns about the widespread use of algorithms in digital markets exhibiting characteristics that may lead to anti-competitive behavior.

Grab’s market dominance remains unchallenged

Grab not having a competition adds another layer to the problem. 

In 2018, the Philippine Competition Commission cautioned against Grab acquiring the Philippine operations of its lone and credible rival, Uber, stating that it would undermine competition. But the antitrust body later cleared the merger when Grab committed to address service quality and transparency concerns. Six years later, Grab’s market dominance remains unchallenged.

Indonesian ride-hailing startup Go-Jek, the only potential competition to Grab, tried several times to enter the Philippine market, but faced numerous roadblocks. 

The LTFRB in August 2018 imposed a moratorium on new applications from ride-hailing platforms, saying it needed to review the effect of the cap on the pool of the 65,000 approved TNVS units. 

Go-jek re-applied several times but was rejected because of the 40% foreign ownership limit for public transport services, according to Bloomberg. 

The Philippine Constitution requires companies to be least 60% Filipino-owned to operate public-utility services. Go-jek has a local subsidiary, Velox South-East Asia Holdings, but only about 20% of it was reported to have been owned by a Filipino shareholder.

Go-jek’s car-hailing unit, Go-Car, helped push Uber out of Southeast Asia and outgrew Grab as the most popular ride-hailing service in Indonesia, the Financial Times had reported.

Former LTFRB board member Inton said the exit of Uber ultimately favored Grab. 

“Why? Because it’s only Grab. There’s nothing else. But that situation should be regulated. Otherwise, Grab will be over and above regulation already. And Grab is so big now. The perception is that it is untouchable already, which should not be the case,” he said.

Inton urged the LTFRB to start scrutinizing surge pricing.

Grab violates commitments

Since the 2018 merger, the PCC has been looking into Grab’s operations and issuing penalties on the company because of its failure to comply with its commitments, particularly with pricing issues. 

The PCC explained in a written response to PCIJ’s queries that in principle, Grab must keep fares within a range as if a competitor like Uber were present in the market.

Asked how it monitors Grab’s compliance with its merger deal commitments, the PCC said it tracked Grab’s compliance through third-party monitors using reports generated by Grab. Grab submitted quarterly reports to the PCC. 

The PCC, in turn, furnished the monitor with copies of these reports. The monitor then informed the PCC of its assessment, including any findings of non-compliance. (The PCC declined PCIJ’s request for a copy of the quarterly monitoring reports because these are supposed to be “confidential.”)

The PCC said it had penalized and fined Grab for violations of its commitments in multiple instances. Fines have totaled P86.7 million over the years since the merger. The amount includes a P16 million fine in October 2018 for violating key provisions of the Interim Measures Order (IMO) during the merger review period and a P9 million fine in February 2023 for providing incorrect and misleading information in compliance reports and failure to comply with PCC orders.

The PCC has also ordered Grab to refund a total of P25 million to its riders for violating price monitoring commitments. Of this amount, P4.7 million will be remitted to the National Treasury because it was not claimed by eligible Grab riders.

According to Grab, all fines have been paid in full and on time, but the PCC clarified that Grab had yet to settle a P16 million fine, which is the subject of a petition for review before the Court of Appeals.

However, the PCC pointed out that Grab’s commitments to service quality and fare transparency have expired and were no longer being monitored by the PCC. The only remaining commitments under monitoring, it said, were about non-exclusivity and incentives. These pertain to drivers who are not supposed to be tied to just one ride-hailing company.

Grab buys Move It

Digital and transport advocates also claim that Grab has monopolized the four-wheel transport service and that the company will soon monopolize the transportation sector. This is in context of Grab’s acquisition of motorcycle taxi firm Move It.

Grab Philippines has a different perspective, pointing to a “competitive” market of 18 Transport Network Companies (TNCs) accredited by the LTFRB. As regards its acquisition of Move It, Grab stressed that the PCC, the competition watchdog, had cleared the transaction. 

“Digital ride-hailing services, both four-wheeled and two-wheeled, are just one segment of the entire transportation landscape. The sector remains competitive, with numerous players and options available to the public. Grab’s acquisition of Move It does not alter the conditions that have contributed to the competitiveness and dynamism of the transportation sector,” Grab claimed.

While it’s true that there are several other players in the Philippines, none have the financial and technical resources to threaten Grab’s market dominance.

Apart from legislation and setting up AIAs, the government needs to foster innovation, especially now when there isn’t much incentive to build competing apps, Ligot said. If there are no incentives, the Philippines will be beholden to foreign companies, he said.

“Grab had this first-mover advantage. Or rather second. Uber came first. And you can see how it really shredded the taxi industry. Partly because of the taxi industry also. It’s an ugly experience, right? They rig the meter. It’s inefficient. Suddenly, an algorithm comes and makes it efficient. But now we’re hostage to the algorithm,” he added. 

That’s a hard pill to swallow for many commuters, drivers, and riders to whom ride-hailing apps have become a lifeline. 

Torres’ family eventually decided to move to a place near the son’s school. She no longer takes GrabCar every day.

But she still takes it whenever she’s with her kids or family. “I would rather that I take Grab. (One main reason) is the traceability, in the event something happens.”

She’s hoping for alternatives. 

“Hopefully, once my kids are a bit older, maybe they can take a cab instead. But for now, that’s not the case yet,” the mother said.

This story was produced by the Philippine Center for Investigative Journalism in partnership with the Pulitzer Center’s AI Accountability Network. 

It was reported by Pulitzer Center’s AI Accountability Network fellow Karol Ilagan and data specialist Federico Acosta Rainis. 

Jabes Florian Lazaro contributed reporting and research for the article.

Data collection was done by Angelica Alcantara, Jay-ar Alombro, Donna Clarisse Blacer, Lyjah Tiffany Bonzo, James Kenneth Calzado, Gina de Castro, Maverick de Castro, Dominique Flores, Lois Garcia, Guinevere Latoza, Aya Mance, Faith Maniquis, Karmela Melgarejo, Gabriel Muñoz, Arone Jervin Ocampo, Matthew Raralio, Arriana Santos, and Angelica Ty.

Felipe Salvosa II was the lead editor. 

Photographs were taken by Bernard Testa. Illustrations were created by Joseph Luigi Almuena.

Data visualizations were designed by Karol Ilagan, Federico Acosta Rainis, and Kuang Keng Kuek Ser.

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