Govt to address e-hailing through franchised taxis

The government made clear on Tuesday that it will retain its plan to introduce Uber-model “franchised taxis” to answer the call from the city’s people to bring competition into the ride-hailing market.

The proposal will be tabled to the city’s legislature for relevant legislation in the first half next year, a Transport and Housing Bureau spokesperson said.

The statement came after Hong Kong’s consumer rights watchdog — the Consumer Council — urged the government to open up quotas for the city’s car-hailing service providers and give consumers the right to choose.

Wong Yuk-shan, Consumer Council chairman, said the government should relax requirements in the current private hire-car permit system as a first step, so e-hailing cars could be qualified to operate.

Under current rules it is hard for car-hailing companies to apply for the 1,500 hire-car permits, which require applicants to identify specific routes vehicles will operate on.

He urged the government to issue three different kinds of licenses — to the service providers, vehicles and drivers.

Wong suggests the government license between three and 11 e-hailing operators in the first round.

The government said it will only study the possibility of bringing in regulated carhailing apps after the Legislative Council concludes the franchised taxi legislation.

The government in March introduced its plan to add 600 “premium” taxis — the franchised taxis — which offer mobile services to provide better services. Fares are expected to be 35 to 50 percent higher

than the current taxi rate.

Transport experts generally preferred the Consumer Council’s regulatory model than the government’s proposal. They said the competition created by opening up the market would help improve services.

Former chairman of LegCo’s Panel on Transport Michael Tien Puk-sun told China Daily he was disappointed by the government’s response.

He believed franchised taxis would have the same clientele as ordinary taxis. As both clients call taxis by mainly by standing and hailing on the street, introduction of franchised taxis will hurt the overall interests of the taxi industry.

The e-hailing cars will operate mainly on reservation, which will introduce healthy competition and improve services, added Tien.

He said the government should issue two to three licenses to service providers and about 1,000 licenses to vehicles to start with.

Hung Wing-tat, associate professor in the Department of Civil and Environmental Engineering at the Hong Kong Polytechnic University, also disagreed with the government’s franchised taxis scheme.

He said the way to improve the city’s hired-car services lies in two directions – training the taxi drivers with a reward and punishment mechanism and a regulated e-hailing services market to create competition.

But he doubted if the introduction of licensing now is practical as so many e-hailing vehicles already run on the street. He suggested the government offer licenses to all existing e-hailing service platforms, unless they do not meet regulation standards.

In June, a survey by the Chinese University of Hong Kong’s Centre for Communication and Public Opinion Survey, commissioned by Uber Hong Kong, found 76 percent of respondents of all ages said they needed pointto-point traffic service alternatives such as Uber.

Uber Hong Kong welcomed the council’s proposals and hoped to work out a favorable mechanism for Hong Kong’s point-to-point traffic service. According to the company’s statistics, it has more than 30,000 drivers in the city.

However, the city’s taxi trade voiced firm opposition. Ng Kwan-sing, chairman of the Taxi Dealers and Owners Association, said the current 18,000 taxis could provide services in line with those from e-hailing cars, if the industry receives government assistance.