Time to review outdated laws that bar ride-hailing apps

HKEJ Editorial July 20, 2018 11:32

Earlier this week, 28 Uber drivers were convicted of providing car-hire services without permits at the Kowloon City Magistrates' Courts, and were fined between HK$3,800 and HK$4,500.

In his ruling, Magistrate Joseph To Ho-shing said the drivers were clearly providing for-hire transport services without permits because the drivers and the passengers did not know each other and the drivers told the passengers to pay.

However, he also said public policies should take into account major technological breakthroughs.

To recalled that the Legislative Council had taken notice of the problems arising from point-to-point, personalized car-hire services back in 2015. As such, he urged the administration to devise remedial measures to address the issue promptly.

Although the magistrate didn’t specify what kind of remedial measures should be taken, his message to the government is self-explanatory.

In our opinion, the most feasible option on the table right now is to review our outdated laws in order to meet the changing needs of society.

For example, the administration can consider opening up the car-hire service market by introducing a licensing system, which would give the public more choices of transport services while sparing Uber drivers the fear of falling into legal traps. That would be a win-win for all.

From the perspective of consumers, opening the car-hire service market to more competition can’t be a bad thing: it will save them the many hassles of arranging for transport, such as putting up with taxi drivers who refuse, select or overcharge passengers.

In fact, the Consumer Council carried out an extensive study on public demand for point-to-point transport service in Hong Kong.

And in November last year, the watchdog suggested that the government open up the car-hire market in a step-by-step fashion, and foster an operating environment that would facilitate fair competition and raise the number of consumer choices by separating the markets for traditional taxis and car-hailing app operators.

While the future of online cab-hailing platforms in the city still hangs in the balance, thanks to the government’s foot-dragging, there are two things that we have found noteworthy with this recent court case.

First, the authorities were only pressing charges against the Uber drivers, but not Uber itself. And second, all of the 28 convicted drivers were spared criminal charges of driving without third party insurance.

It is said that it was Uber, not the car owners themselves, who had got these drivers insured before they hit the road.

And that begs the question: could that be an indication that the government has already tacitly given Uber the green light by allowing such a new model of insurance policy?

This article appeared in the Hong Kong Economic Journal on July 18

Translation by Alan Lee

[Chinese version 中文版]

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HKEJ Editorial

Hong Kong Economic Journal