25 October 2016
Ma Kiu-sang said his minibus company will undergo a transformation and focus more on investing in property. Photo: HKEJ
Ma Kiu-sang said his minibus company will undergo a transformation and focus more on investing in property. Photo: HKEJ

Why leading minibus operator is shifting focus to property

Koon Wing Motors Ltd., the largest operator of green minibuses in Hong Kong, is planning to shift its focus to investment in property.

Ma Kiu-sang, the son of Koon Wing’s founder, Ma Ah-muk, said the minibus business has been shrinking.

The company will undergo a transformation to invest more in properties.

In future, two-thirds of its revenue is going to come from segments like the leasing of shops and mall operations.

“Operating minibuses is a hard business”, Ma said.

The firm owns about 650 minibuses. More than half of the routes it operates lose money.

A shortage of drivers is the main challenge it faces.

“It is difficult for us to hire drivers,” Ma said. “As the income is not high, most young people are not willing to join the industry.

“Our drivers earn between HK$400 (US$52) and HK$500 per shift. So you only earn around HK$10,000 if you work 26 days a month, which is less than the income of bus and taxi drivers. 

“Before, many bus drivers would drive minibuses after they retired, but now, even bus companies find it hard to hire enough staff. They re-employ these retired drivers instead.

“We have a 20 percent driver shortage, and our fleet can’t be fully utilized as a result.

“Two out of 10 minibuses are idle. The situation gets even worse on Sunday, when many drivers take their day off.” 

Worse, from June 1, the government is requiring all newly employed drivers to finish a pre-employment course before being granted a driving license.

Ma has discussed with the government the possibility of importing labor, but the authorities are not interested in the idea.

However, the prospects are not entirely gloomy for the minibus business.

The extension of the HK$2 fare concession scheme for the elderly and disabled to green minibuses in March has helped increase the number of passengers.

Ma said between 70 percent and 80 percent of his minibus routes recorded an increase in passengers.

On Tuesday, the government held a hearing on the minibus industry, the first in nearly 10 years.

The industry has been fighting for a long time to increase the number of seats in each minibus to 24 from 16. It believes that the regulator may finally give the green light to the proposal.

If the change is implemented, it would be the first since the number was increased from 14 more than 20 years ago.

The move could boost minibus revenues by 20 percent during peak hours.

While things are picking up, Ma remains cautious about the minibus business.

“The business was founded by my father; of course I want to maintain it,” he said.

“However, we will not open any new routes in the future.

“After all, in the government’s transportation planning, the railway system plays the main role, and minibuses are just complementary.”

This article first appeared in the Hong Kong Economic Journal on May 4.

Translation by Betsy Tse

[Chinese version 中文版]

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