It’s an all familiar scenario in the past 10 years.
The entry of ride-hailing services like Grab into Iloilo City has rattled the local taxi industry. For months, taxi drivers have voiced frustration, citing significant drops in income. Some drivers, once able to bring home PHP 1,000 daily, now struggle to make PHP 300 to PHP 500. Their complaint: Grab has taken over a market they once dominated.
While some may see this as a natural shift brought on by technological advancements, the impact on traditional taxi drivers cannot be ignored. The introduction of Grab in March 2023 has created a competitive environment that has left many taxi operators at a disadvantage. As they wait at terminals or prowl city streets for passengers, Grab drivers, booked via app, offer modern conveniences that appeal to commuters.
Grab, for its part, operates within the bounds of regulation. Grab Philippines’ regional operations head, Joan Yoshida, explained that the service is limited to cars booked through the app, with passengers getting detailed trip information. The Land Transportation Franchising and Regulatory Board (LTFRB) has also capped the number of units one person can operate at three, preventing large-scale ownership that could monopolize the market.
The situation has also sparked political discussions, with allegations that some influential figures own numerous Grab units, potentially sidelining smaller operators. Mayor Jerry Treñas vehemently denied owning any Grab cars, offering to resign if proven otherwise. While these claims remain unsubstantiated, they add another layer to the growing debate over who benefits most from this new mode of transportation.
But the deeper issue here goes beyond the taxi-versus-Grab battle. The real lesson for both the local government and the taxi industry is how they should tackle major disruptions. The arrival of Grab was inevitable, as technological innovations are bound to change industries. But how both the government and traditional taxi operators responded to this disruption could be better.
Local government units (LGUs) should have anticipated the entry of ride-hailing services and acted preemptively to prepare the taxi industry. Modernization programs could have been put in place to allow traditional taxis to remain competitive. Instead, many taxi operators were left scrambling to adapt to a new business model that had already begun to reshape the transport landscape.
The taxi industry, for its part, must also learn to innovate. In the face of technological disruption, industries cannot rely solely on the status quo. A possible way forward for taxi operators is to embrace technology themselves—invest in digital platforms that allow for easier passenger booking, introduce cashless payments, and improve service quality to meet the expectations of today’s commuters.
In addition, collaboration between LGUs and the taxi industry is key. LGUs should foster a regulatory environment that encourages innovation while ensuring that traditional industries are not left behind. This includes offering incentives for taxi drivers and operators who modernize their fleets or adopt new technologies. Without such support, we will continue to see the slow erosion of traditional services as modern alternatives take over.
Moreover, the taxi industry should not see ride-hailing services as enemies but as benchmarks. What has made Grab popular? Convenience, safety, and efficiency. By addressing these factors, traditional taxis can still play a vital role in the transport ecosystem.
There is also a broader lesson for cities like Iloilo, which are rapidly urbanizing. As new technologies and services enter the market, there must be a plan to balance innovation with the needs of existing industries. Ensuring fair competition should not just be a function of limiting fleet sizes or capping permits. It should be about enabling all sectors to thrive, whether they are emerging disruptors or long-standing players.
Ultimately, the tension between Grab and traditional taxis underscores the challenges of modernizing transportation in Iloilo City. LGUs must work toward a future where both technological advancements and traditional services can coexist. The taxi industry must adapt if it is to survive in an increasingly competitive market. For both, the lesson is clear: disrupt or be disrupted.
