Date
11 December 2017
The government has declared Uber services illegal. Last month, 21 Uber drivers were charged for operating without a permit following a police crackdown in May. Photo: Bloomberg.
The government has declared Uber services illegal. Last month, 21 Uber drivers were charged for operating without a permit following a police crackdown in May. Photo: Bloomberg.

Consumer Council urges gov’t to legalize ride-hailing services

The Consumer Council is urging the government to legalize e-hailing services like Uber, saying market reforms are needed to give consumers more choices, the Hong Kong Economic Journal reports.

“Lack of competition in the market results, at least partially, in poor service quality,” said the watchdog’s chairman, Wong Yuk-shan.

Releasing a study on Hong Kong’s e-hailing market and taxi service, Wong urged the government to amend regulations to allow companies like Uber to operate legally but added that they should also be subject to stringent rules.

Fox example, Wong said cars used by such firms should not be more than seven years old while drivers must have at least three years of driving experience.

The watchdog said only licensed taxis and a very limited number of legal hire cars are currently allowed to provide point-to-point transport services, adding this arrangement discourages competition.

It is difficult for consumers to assess the attitude of taxi drivers, said council chief executive Gilly Wong Fung-han. “But if this is included in a regulated e-hailing services platform, people will know which taxi drivers are good and who are bad,” she said.

In a report published Tuesday, the Consumer Council said the government should use a progressive approach to create a level playing field for e-hailing services and taxis. The government should start by relaxing requirements in the current private hire-car permit system to allow e-hailing vehicles to enter the market, the council said.

At present, it is difficult for car-hailing firms, such as Uber, Ryde and Hopsee, to obtain one of the 1,500 hire-car permits because of strict criteria.

Under the council’s proposal, the government should issue three distinct licenses to e-hailing service providers, the vehicles and the drivers.

Depending on the market reaction and the pace of the reforms, licenses should be given in a range of three to 11 e-hailing platforms, according to Wong. License holders must disclose to consumers the fare or any surcharge and the route to be taken before they book the trip.

Service providers should also conduct background security checks on drivers to ensure they have purchased insurance to cover passengers, keep records of trips and handle passenger feedback and complaints.

The watchdog suggested seven-year validity for the new car licenses, to be held by the e-hailing companies or the drivers themselves. In addition, the cars should be in good condition and not older than seven years.

There should be no limit to the number of driving licenses issued but drivers must have at least three years’ driving experience, pass the background security checks and meet the required language skills and health conditions.

Regarding the franchised taxi service scheme proposed by the government, in which there would be three operators running 600 premium taxis, Wong said it would not significantly change the situation as there are 18,000 taxis operating now.

“In comparison to the overall total of 18,000 plus taxis currently operating, the scale of the [franchised taxi] service is rather limited to be of any observable change,” said Wong, as RTHK reports. 

Roundtable lawmaker Michael Tien, who sits on the transport panel in the Legislative Council, told RTHK that he backed the call for e-hailing services to be legalized. He said if such services were regulated, the plan for premium taxi services could be dropped.

“There’s still pressure on the existing taxi trade to improve their service, because they have no excuse. There’s no more inferior or superior concept, they are the ones. They have the market to themselves,” Tien said.

The government has maintained a tough stance on ride-hailing firms since they first began to pop up in the city in 2014. It has for months been cracking down on Uber amid complaints from taxi drivers that the ride-hailing company is robbing them of customers.

Officials have declared their services illegal. Last month, 21 Uber drivers were charged for operating without a permit following a police crackdown in May.

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BN/RA

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