Why the HK govt has suddenly turned hostile against Uber

August 13, 2015 17:15
Despite the police raid on Uber's offices, most Uber drivers say they do not feel threatened. Photo: HKEJ

In an interview with Invest Hong Kong, Sam Gellman, Uber Technologies general manager for Hong Kong, said Hong Kong is one of the best cities in the world. “It has a strong entrepreneurial spirit and a vibrant startup scene,” he said.

Gellman was probably speaking sincerely, but was he making an accurate description of Hong Kong?

On Tuesday police raided two offices of the car-hailing company in Hong Kong, and arrested five drivers and three executives.

Uber’s office in Cheung Sha Wan was closed on Wednesday morning, according to NOW News.

But the group has sent out a message to all its drivers in Hong Kong, saying that the five arrested drivers were released Tuesday afternoon.

Despite the police action, most Uber drivers did not feel threatened.

They cite three reasons. To start with, none of their transactions involves cash. Also, the drivers believe that they are being backed up by Uber's pool of legal experts.

Last but not least, the servers Uber uses to store its data are in the United States, which means police cannot easily obtain information about its drivers and operation.

“The police just wanted to show that they have got their job done in order to appease those angry taxi drivers, but there is nothing that they could really do about it,” an Uber van driver told the Hong Kong Economic Journal.

Interestingly, Uber was named as one of the success stories on the website of Invest Hong Kong, which is an agency of the Hong Kong government responsible for attracting foreign direct investment, supporting overseas businesses, including those from mainland China and Taiwan, to set up and expand in Hong Kong.

However, the article on Uber can no longer be found on the Invest Hong Kong site, and instead the title only shows “Page not found” to indicate the link is dead or broken.

Responding to media inquiries, a spokesperson for Invest Hong Kong said the Uber case study was removed from the website because the company “is now being investigated for allegedly operating outside of the legal ambit”.  The spokesperson did not elaborate on what is meant by “legal ambit”.

Legislator Charles Peter Mok, who represents the information technology industry, said in a radio program on Wednesday that the whole incident is ironic as each government department works in its own way without any communication.

Why has the government’s attitude towards Uber turned 180 degrees in just a few months?

It is quite clear that the aim of the police operation is to pacify the taxi industry. Some taxi drivers staged a protest against the car-hailing app last month.

However, it is unclear whether the Hong Kong government is being pressured by any interest group.

Taxi license is a kind of an alternative investment in Hong Kong. Many investors, including some well-known politicians, have grown wealthy by investing in local taxi licenses.

For example, it is reported that Maria Tam Wai-chu, currently a Hong Kong deputy to the National People's Congress, has held a large chunk of shares in Sinda Taxi Company with her family. The company focuses on investing and speculating in the taxi license market.

The Hong Kong government has refused to grant new taxi licenses for more than 20 years in the name of improving air quality and easing traffic congestion in the city.

As a result, the price of taxi licenses has gone up sharply over the past few years.

According to the taxiexchange.com, there have been 13 license transactions in August so far, with the latest amounting to HK$6.85 million.

With that amount you can buy a three-room, 541-square-foot apartment in Metro Town in Tseung Kwan O.

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EJ Insight writer