Date
28 March 2017
Online platform 'Sam the Local' matches tourists and local citizens interested in serving as tour guides. Travel agents have questioned the legality of the firm's business model. Photo: Sam the Local
Online platform 'Sam the Local' matches tourists and local citizens interested in serving as tour guides. Travel agents have questioned the legality of the firm's business model. Photo: Sam the Local

Govt must clear legal traps facing online startups

Hong Kong has been witnessing a boom in online startups in recent years. Many of the ventures are operating in previously unheard-of ways, posing a challenge to the city’s existing regulatory and legal framework.

An online platform launched in the past year allows an average citizen to register as part-time tour guide to show foreign visitors around in the city, offering customized trips tailored to the particular interests of the clients. The guide can set his own hourly rate and the website will charge a 10 percent commission.

Some people who used to organize unique customized group tours believe the local tourism industry needs new ideas, and that we just can’t rely completely on Individual Visit Scheme travelers and the same old key attraction spots.

They are calling on the government to adopt a more receptive mindset when it comes to regulation.

Former graphic designer Maggie, a Chinese-American, co-founded “Sam the Local” last year, a venture that made it to the final top 10 of the “Empowering Young Entrepreneurs Programme” (the “EYE”) co-organized by Google and the Chinese University of Hong Kong.

It officially opened for business in January this year.

“Sam the Local” serves as an online platform on which tourists can search for tour guides that can match their needs and expectations.

It works like this: local citizens can register themselves on the website, detailing their specialties, interests, favorite food, availability time and hourly rate to serve as tour guides. Tourists can then search for the guides best suitable, and contact them directly to make the trip arrangements.

As far as meal costs, transport costs and the exact itinerary are concerned, it is up to the two parties to decide based on the negotiations.

However, according to the Travel Agents Registry, the kind of service that “Sam the Local” provides is similar in nature to that provided by travel agents.

Since the website is operating without a license, it might be in violation of the existing “Travel Agents Ordinance”, and the operator could be subject to a fine of HK$100,000 and two years’ imprisonment, it has been pointed out.

Yet Maggie insists that the tour guides operating through her platform are not travel agents in the traditional sense, and hence there is no need to apply for a license.

“We are not travel agents. What we do is provide an online platform on which travelers and guides can connect with one another. Besides, these guides are not our staff,” she says.

She declined to say whether the police have spoken with her, but stressed that if her website is deemed to be violating the law, she would definitely adjust her operation to ensure compliance.

The government has claimed that it welcomes the introduction of new technologies. But if it fails to change the law to adapt to the new circumstances, startups may easily fall victim to legal traps, just like multinational Uber did.

If Hong Kong wants to ride the tech boom, it has to get ready for it.

This article appeared in the Hong Kong Economic Journal on Sept. 1.

Translation by Alan Lee

[Chinese version 中文版]

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RC

Hong Kong Economic Journal

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