This is the real scandal behind the Uber row

August 22, 2015 08:01
Officers haul away documents after a raid on Uber (left photo). Hong Kong taxis operate under a highly regulated government-controlled monopoly system. Photo: HKEJ

This Uber row is really something and I sense it is about a great deal more than the problems of the taxi service because it exposes the crummy way government-organized monopolies conspire to deprive Hong Kong consumers of better services and more competitive prices.

The current organization of the taxi service encapsulates this conflagration of vested interests and anti-competitive practices.

This is because in common with all forms of Hong Kong public transport, the taxi service operates under a highly regulated government-controlled monopoly system.

It’s a system that pays little regard to demand and has thus fixed the number of taxi licenses at 18,138, which sounds like a lot but not in a place which received more than 60 million visitors last year, not forgetting the seven million or so residents who are here all the time.

However, the picture is more complicated because the overwhelming bulk of these licenses are held by quite a small number of syndicates who can afford the astronomical price of a license and the vehicle itself; that price has now soared above the HK$7 million (US$903,021) mark.

This means that very, very few people who drive taxis own them and they have pay the taxi owners about half of what they earn.

It also means that most of these vehicles are in operation 24 hours a day as they are operated in shifts.

Any vehicle taking that kind of punishment is unlikely to remain in pristine condition for long. Indeed, what is remarkable is that the bulk of taxis are not in worse shape.

The drivers, meanwhile, are forced to work very long hours to make a modest living.

So, again, it is perhaps not surprising that they are sometimes grumpy and unhelpful.

My personal experience, however, is that most drivers are businesslike and that unlike cabbies in other Asian cities, particularly in the mainland, they have very good destination knowledge.

This system could be changed with minimal effort by the simple expedient of increasing the number of licenses and lowering the fees.

At a stroke, this would provide more taxis and create a new class of entrepreneurial owner-operators with a much higher level of motivation to provide a better service.

However, to do this involves challenging the vested interests of some well connected and powerful taxi license owners who would, no doubt, run to Beijing for redress.

It is a sign of weakness that the government will not even contemplate this remedy, even though it is entirely obvious.

By the same logic, the government should be looking to break up the official rice supply monopoly, the petrol cartel and of course the land supply racket designed to ensure that only the biggest developers are able to secure new sites and thus keep property prices at stratospheric levels.

Challenging all these vested interests is nowhere close to the official agenda.

Meanwhile, Hong Kong people suffer the consequences in the shape of high prices and poor service.

This is the real scandal that lies behind the Uber row.

Red alert for red alerts

The politicization of all things by the CY Leung regime continues apace and now extends to safety matters.

This has recently been seen in the way the government issues travel alerts to warn residents of destinations that may be dangerous.

There was no surprise when a red alert was quickly issued for travel to Bangkok in the wake of the fatal Erawan Shrine bombing but far worse devastation emanated from Tianjin following the two explosions and widespread fallout of poisonous gases and chemicals.

According to the HKSAR government, there should be no problems for travellers going to Tianjin. Or to put it another way, there are greater political problems pointing out these problems.

Another international survey: high on satire, low on facts

Finally, congratulations to those fine people over at the Economist Intelligence Unit who have upgraded various Chinese cities, including Beijing, in their bi-annual international livability survey while downgrading Hong Kong because of the Occupy protests.

Apparently, Hong Kong is now more unstable and less livable as a result.

No doubt these sages have carefully avoided walking around "unstable" Hong Kong and unlike most residents failed to have rejoiced over the lowered pollution and walkability of streets in the center of town while the protests were under way.

However they have demonstrated a keen sense of satire by upping the ratings for Beijing, Tianjin and Shanghai.

Let’s set aside the recent Tianjin disaster that came after the results were compiled and focus on the vastly better levels of pollution, improved service standards and wide choice of uncensored entertainment in these mainland cities.

Someone over at the EIU is clearly having a laugh.

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Hong Kong-based journalist, broadcaster and book author