Date
14 December 2018
The Consumer Council proposes that current holders of Hire Car Permits be allowed to provide transport service for passengers through mobile apps such as Uber. Photo: Bloomberg
The Consumer Council proposes that current holders of Hire Car Permits be allowed to provide transport service for passengers through mobile apps such as Uber. Photo: Bloomberg

Opening up taxi market to more competition is the way to go

On Thursday last week, hundreds of local taxi drivers drove to the government headquarters in Admiralty to protest against cab-hailing apps like Uber and demand tighter regulation of online car-hailing platforms in order to protect their jobs.

Since it entered Hong Kong in 2014, Uber has proven a game-changer and quickly caught on among local commuters.

Many people have found that mobile apps like Uber can give them access to much better transport service than local taxis, which they say are notorious for overcharging fares, refusing passengers and making detours.

On the other hand, taxi owners and drivers regard Uber as a huge threat to their livelihood, and their mounting grievances against the government’s sluggishness in regulating car-hailing apps are about to boil over.

So what should the government do amid this raging controversy over car-hailing services?

Perhaps the administration can consider the advice given by the Consumer Council on how to rationalize and regulate the unstoppable global wave of cab-hailing apps.

In its study published at the end of last year, the Consumer Council, having seriously looked at the experience in nine other cities such as Beijing, Singapore and London, recommended that the government introduce a licensing system for existing taxi-hailing app operators and drivers.

It suggested that the government allow the current 1,500 holders of Hire Car Permits (HCP) issued by the Transport Department to provide transport service for passengers through these mobile apps.

Under the proposal, HCP holders can only pick up passengers through online apps, and cannot solicit customers on the streets like conventional taxis. Meanwhile, passengers can only hire these cars with HCPs through mobile apps like Uber.

By doing so, the Consumer Council report said, car-hailing apps would be catering for a different market, i.e., customers who are willing to pay more for quality car service, whereas traditional taxis can continue with their existing business model, thereby creating a win-win situation for both car-hailing app operators and the traditional taxi industry.

We believe the Consumer Council’s suggestion is both practical and feasible because it can open up the local car service market to more competition. Not only will passengers have more choices, their safety can also be assured under the government oversight.

Besides, introducing more competition to the market will push the traditional taxi industry to improve the quality of its service.

In the end, passengers, cab-hailing app operators and the traditional taxi industry would all be winners.

As such, we just can’t see any reason why the Transport Department shouldn’t take the Consumer Council’s proposal seriously and act accordingly.

This article appeared in the Hong Kong Economic Journal on March 15

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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JC/CG

Hong Kong Economic Journal

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