21 October 2016
Justice Secretary Rimsky Yuen said he is still waiting for police to gather more evidence on the Uber case. Photos: Reuters, NowTV
Justice Secretary Rimsky Yuen said he is still waiting for police to gather more evidence on the Uber case. Photos: Reuters, NowTV

Why the government appears to be softening its stance on Uber

It’s quite obvious that the Hong Kong government has yet to catch up with the internet trend in terms policies and regulations.

Otherwise, innovative enterprises such as the mobile car-hire service operator Uber would have been welcomed by the government rather than be subjected to police raids and arrests amid allegations that it is operating an unlicensed business in the city.

Some people still think that issues arising from the platform should be addressed in accordance with the existing regulatory framework.

As a result, it makes sense for the police to take action against Uber to protect the interest of the taxi industry and the holders of 8,000 taxi licenses worth a total of HK$126 billion.

According to Police Commissioner Stephen Lo Wai-chung, his office has been investigating the case of Uber for a long time and he is confident that the people involved will be brought to court.

Some experts, however, are not too optimistic that charges will be filed against Uber as they believe the business is operating in the grey area of the law.

Some political observers also point to the China factor.

While the recent police action against Uber has raised public awareness of the San Francisco-based business operation, there is another company doing a similar business called Kauidi DaChe, which is jointly owned by China’s top two internet companies — Tencent and Alibaba. 

Already, the question is being raised: Why is Hong Kong Police going after Uber but not taking any action against car owners and taxi drivers joining the Kauidi DaChe platform?

So it is quite interesting to hear the remarks that our Justice Secretary Rimsky Yuen Kwok-keung made about the Uber case on Monday morning. (Let’s not forget that he is the government’s chief prosecutor who is responsible for filing charges against suspected law offenders.) 

Yuen said the government has yet to decide if it will prosecute the staff of the car-hailing company.

The Justice Department is still waiting for police to gather more evidence before deciding on further legal action, he said.

From the government’s perspective, Yuen needs to maintain neutralility as he is the one to decide whether to file charges against Uber.

But from the public perspective, it is quite clear that the police overreacted to the complaints of taxi operators against Uber without making a thorough study of its business model and operation.

They simply believed what they had been told, that the company is operating without license and insurance coverage for its drivers.

Now here comes the complication presented by Kauidi DaChe, which is also entering the Hong Kong market and offering the same service that Uber is providing.

Kauidi One service, which was launched last year, directly competes with Uber in mainland China, specifically in the high-end limousine service.

In August, Kauidi One launched a dedicated mobile app in Hong Kong with a special promotion that offered a single journey to the airport for just HK$199.

The service, however, has been suspended after police raided Uber’s Hong Kong office and arrested several drivers and personnel last week.

Prior to the service suspension, Kauidi DaChe was also offering another service called Kauidi Taxi, a mobile platform that connects taxi drivers and passengers.

A Kauidi One driver told a passenger that he was not afraid of the police action against Uber, noting that the company’s top boss is Jack Ma.

“The service is quite popular in China, and I don’t believe the police will arrest us,” he said. “The police is just after Uber.”

And so the recent police action against Uber has raised the issue of bias, of whether the police are treating companies differently. 

Even some Uber drivers think that police are being unfair to their company as they are not lifting a finger on Kuadi DaChe.

They believe that if Uber’s operation is violating the law then Kuadi DaChe is also committing an offense because it is operating in the same manner.

“Is there a political reason behind the raid on Uber?” an Uber driver asked last week.

The police action on Uber and their apparent hands-off policy towards Kuaidi DaChe have raised suspicions that the Hong Kong government is trying to ease out the US company to allow the Chinese service to dominate the market.

While there is no evidence to support such suspicions, the case has added to the erosion of public confidence in the government.

And so the ball is now on the government’s court.

With 50,000 Hong Kong people expressing their support for the car-hailing service, Uber has launched a campaign to gain government approval of its operation in the city. 

It has sought a meeting with Transport and Housing Minister Anthony Cheung Bing-leung, and even sent emails with an attached sample letter to Uber users, requesting them to send the same request to Cheung.

The Hong Kong government should take a proactive role in improving the existing regulatory framework to accommodate innovations in business.

The innovative car-hailing service has received warm response from the public, and the government should facilitate its entry into the market.

It is important for the government to hold direct and sincere discussions with these new players, and allow them to enhance competition in the market, which will redound to the benefit of the public.

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EJ Insight writer

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