Franchised taxi service plan draws lukewarm reactions

The government plans to introduce franchised taxis to meet the demand in the community for personalized and point-to-point public transport services of higher quality and with online hailing features.

The reaction from the taxi industry is not very enthusiastic, however.

The Franchised Taxi Services Bill, which will be gazetted on April 26, seeks to establish a new regulatory regime that will confer on the Chief Executive in Council the powers to grant and administer franchises for the franchised taxi service, and to impose franchise terms, the Hong Kong Economic Journal reports, citing a government statement.

As the taxis will operate under a franchise model, the government will be able to clearly prescribe the service levels and set service standards in respect of vehicle types, compartment facilities, online hailing arrangements, safety requirements, training for drivers, customer service and complaint handling, among others, through the franchise terms.

Penalties will be imposed on a franchise operator or the franchise itself may be revoked if the operator and its drivers fail to meet the prescribed service standards.

Under a proposed trial scheme, 600 franchised taxis will be introduced in Hong Kong and three franchises will be granted through open tender, according to a spokesman for the Transport and Housing Bureau (THB).

Each franchise has a five-year lifespan and will not be non-transferable and non-renewable. A franchiser can operate 200 vehicles to provide the service.

A spokesman said franchised taxis and ordinary taxis “will have different market positioning in the public transport system, with the former being an enhanced complement to the latter”.

Ordinary taxis will “continue to constitute the vast majority of taxi services and their fare level is more affordable to the general public”, he added.

The proposed bill will be tabled in the Legislative Council for first reading and second reading on May 8.

In a document submitted to Legco, the THB suggested that the fare charged by franchised taxis be set at a level that is 50 percent higher than that charged by ordinary taxis, or a HK$36 flagdown compared with HK$24 currently charged by urban taxis.

Commenting on the trial scheme, Sonia Cheng Man-yee, executive director of Chung Shing Taxi and SynCab, said both companies will not bid for the franchises, citing their serious shortage of drivers as the main reason.

There is no way to hire drivers for franchised services while the companies are still in desperate need of drivers for ordinary taxis, Cheng said.

Besides, the general public wants all taxis operating in the city to provide good services, not just 600 designated ones.

Chong Wing-tak, chairman of the CTOD Association Co. Ltd., also did not agree with the scheme, saying that having different fare rates could divide the taxi industry, while Ng Kwan-shing, chairman of the Taxi Dealers and Owners Association Ltd., said the scheme will marginalize existing taxis.

Civic Party lawmaker Jeremy Tam Man-ho, who is a member of the Committee on Taxi Service Quality, suggested that franchised taxis be allowed to have more flexible rates, which would allow them to charge less during non-rush hours, that they be restricted to online appointments only and  be barred from randomly picking up passengers on the streets.

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