By: Miguel R. Camus - @inquirerdotnetPhilippine Daily Inquirer / 06:01 AM November 04, 2019
China’s biggest ride-sharing company DiDi Chuxing is in talks with a Filipino group in a bid to end Grab Philippines’ virtual monopoly in the country, the Inquirer learned
DiDi’s entry in the Philippines—potentially the latest in its global expansion—will bring down prices and offer more options for commuters, said Ilocos Sur politician Luis “Chavit” Singson, who confirmed negotiations with DiDi.
“We want to break the monopoly of Grab,” Singson said of the Singapore-based ride-sharing giant in an interview last week.
Singson owns U-Hop Transportation Network Vehicle System Inc. (U-Hop), one of 10 Transport Network Companies (TNC) allowed to operate ride-sharing services in the Philippines.
U-Hop is renewing its accreditation before the Land Transportation Franchising and Regulatory Board (LTFRB), which last year issued a moratorium on the issuance of new TNC licenses.
Singson was unable to provide further details on the group’s discussions with Didi.
A DiDi representative, however, said in an email there were no current plans to expand to the Philippines. The email was sent on Nov. 5 in response to an Inquirer request for comment last Oct. 31. DiDi and Singson did not immediately respond to further requests for comment.
As a public utility, TNCs are bound by the 40-percent foreign ownership limit set by the Philippine constitution. Companies like DiDi will need to comply with the cap if it is to avoid the fate of Indonesia’s Go-Jek, which last year was denied a license by the LTFRB for failing to meet the local ownership requirement.
DiDi is one of the world’s largest mobile transport platforms. It offers a host of services from on-demand cars to e-bike sharing and food deliveries to more than 550 million users across Asia, Latin America and Australia, its website showed.
“We think this will help Filipinos,” said Singson, a former governor and now mayor of Narvacan. He also chairs LCS Holdings and owns a range of businesses such as bus operator Partas, car dealerships and more recently, the construction of cell towers.
Singson said the ride-sharing opportunity was significant and that Filipinos would warm up to a new player amid complaints that fares have shot up in the wake of Grab’s March 2018 acquisition of the Southeast Asian operations of United States-based Uber.
More than a year since the transaction, the Philippine Competition Commission (PCC) said the industry remained uncompetitive while Grab countered that price spikes were a sign of strong demand.
There are at least eight other TNCs apart from Grab Philippines and U-Hop but none came close to Grab’s estimated 90-percent market share in the country.
The PCC, which once called Grab Philippines a virtual monopoly, had fined Grab and Uber millions of pesos for violating conditions set by the antitrust body.
Similar to Grab, DiDi also reached its current scale by acquiring Uber in China.
DiDi is also an investor in Grab as it joined Japan’s Softbank in a $2-billion investment round in 2017. Softbank, owned by Japanese billionaire Masayoshi Son, owns stakes in Uber, Grab, DiDi and Ola, a ride-sharing service in India.