Struggling taxi drivers argue that the proposed fare structure is unfair and will do nothing to address the problem of discount operators. Daniel Sin reports
Fung Kwok-shing has experienced many ups and downs in his 24 years as a taxi driver but, lately, there have been more downs than ups. Escalating fuel costs and worsening economic circumstances have combined to put pressure on his operation. And then there is another scourge eroding the earnings of Mr Fung and regular operators like him - 'discount gangs' who undercut the competition by offering reduced fares for long-haul journeys
'Our business could have been better had it not been for the discount gangs,' Mr Fung said. 'They do nothing else but long-haul trips, and this takes away many of our customers.'
Long-haul trips are a cab driver's bread and butter.
'Time means money for taxi drivers,' explained Urban Taxi Drivers Association Joint Committee chairman Kwok Chi-piu. 'It may take about an hour or so for a taxi driver to go from Central to the airport. For that trip, he can receive between HK$200 and HK$300 in fare income.
'But he could only do three to four short-haul trip orders in the same interval, for which he would only receive between HK$60 and HK$70.' And that didn't include the idle time he might spend between orders.
Some lawmakers believe the discount practice must stop. Andrew Cheng Kar-foo, of the Democratic Party, is one of them.
'These discount gangs take business away from taxi drivers who insist on receiving fares according to the meter rate,' he said. 'If nothing is done, these discount gangs will become rampant, and other taxi drivers will lose out on long-haul trips. This is not fair.'
Mr Cheng wants the government to tighten the law, by making it mandatory for all taxi fares to be charged according to the meter.
It is already unlawful under the Road Traffic (Public Service Vehicles) Regulation for a taxi driver to offer a discount to induce a passenger to use his service. The offence is punishable with a fine of HK$10,000 and six months in prison.
However, there is no sanction for the passenger who asks for a lower rate.
'This is a loophole in the law and should be addressed,' said Mr Kwok. 'Some taxi drivers have been assaulted for refusing to accept passengers' requests to lower the fare. Yet the police have not been effective in apprehending the culprits.'
In the period from January 2007 to last month, the police investigated 1,314 taxi drivers via random stops and other means. That resulted in 225 prosecutions - but only six convictions for fare-discounting offences.
The government told the Legislative Council that the discount-gang phenomenon reflected a growing competitiveness in the transport industry, particularly the long-haul sector where drivers were encouraged to undercut their peers.
The government believes that an adjustment to the fare structure and level would keep the discount operators at bay.
Accordingly, it took on board recommendations from the government-appointed Transport Advisory Committee following a three-month consultation with the trade and the public.
On September 23, the government approved the Road Traffic (Public Service Vehicles) (Amendment) Regulation, under which the flagfall fare for urban taxis would increase from HK$16 to HK$18, with a HK$1.50 charge for every subsequent 200 metres - up from HK$1.40. The increment charge is adjusted to HK$1 when the fare reaches HK$70.50, which is the total charge for a 9km journey without waiting time.
The new fare structure, which takes effect on November 30 unless Legco rejects it, will give a passenger a 20 per cent discount on the fare if he or she travels more than 42km.
'The approved adjustment maintains a balance between helping the taxi trade cope with operational difficulties and catering to consumer interests,' said a spokesman for the Transport and Housing Bureau. He said the new fare structure 'was initiated, developed and in general agreed upon by the majority of the taxi trade through a lengthy deliberation process'.
However, enthusiasm for the scheme is far from universal.
'We are concerned about the impact of the proposal on taxi drivers' income,' said Roland Ng Chung-wai, spokesman for the Taxi Drivers and Operators Association, whose members staged a protest in June. 'The government expects that the new fare structure will enable taxi drivers to be compensated for income reduction on long-haul trips by the increase in short-haul trips. This will not work because passengers will be encouraged to take longer trips, and we expect a fall in demand for short-haul trips. With the drop in short-haul trips, taxi drivers will suffer a net loss in income.
'If the government insists on implementing the new fare policy, we will see an immediate increase in the incidence of taxi drivers risking the law by refusing to take long-haul-journey passengers,' Mr Ng added.
Mr Fung said the new scheme would not deter discount operators.
'If passengers ask them for, say, a further 10 per cent off the new fare, will they refuse? Of course they won't, in order not to displease their customers,' he said, adding that he and his fellow drivers would suffer financially.
'We used to make a steady income of around HK$1,000 a shift, with the operating cost standing at around HK$480 including fuel and rental,' Mr Fung said. 'But when the new fare comes into effect, we expect a drop of income to around HK$850, and that will hit us.'
Another driver, who gave his name only as a Mr Lam, said he offered discounts on occasion, mainly to boost income when business was bad. He said the new fare structure should deter discounting, but he was not too unhappy about it.
'It would not affect me too much because most of my orders are short-haul trips, and I should in fact earn more,' Mr Lam said. 'And I would not offer discounts any more because I can't afford another, say, 20 per cent off the new fare. The income would simply not cover the operating cost.'
Mr Lam said the new fares would not reduce demand. 'Taxis are not costly in Hong Kong,' he said. 'People will not stay away from taxis just because of a HK$2 difference. The bus and MTR fares are equally expensive. If three or more people are travelling together, it is sometimes more economical to take a taxi.'
Other drivers and lawmakers say the new measures will not tackle the root problem of discounting. 'Although we originated the idea of raising short-haul fares and lowering long-haul fares, and recommended it to the government last October, we also said that it must be accompanied by a tightening of legislation to curb the practice of fare bargaining,' said Mr Kwok, from the Urban Taxi Drivers Association. 'But the government took the easy way out without resolving to tighten the law.'
Civic Party lawmaker Ronny Tong Ka-wah said the regulation would not curb discounting.
'There is a loophole in the law and, unless something is done about it, discount gangs will persist. The government would not listen, and keeps on putting up excuses for not doing anything,' Mr Tong said.
Mr Cheng, from the Democratic Party, said: 'We have asked for an amendment in the legislation to require that taxi fares are paid according to the meter. The government only promised to review it six months after the new fare structure comes into effect and then determine whether or not there is a need to bring in new regulation. This is disappointing.'
The government has considered making it an offence for a passenger to bargain, but is not convinced of its merits. It told Legco it would be difficult to enforce, particularly in terms of collecting evidence.
'Enforcement difficulties are not reasons for not legislating. Ignoring red lights or compulsory use of safety belts are also difficult to enforce,' said Mr Tong, adding that a legal principle must be established.
The government's efforts to resolve the issue may yet prove futile if legislators insist on a regulation to ensure taxi fares are paid according to the meter.
'But rather than blocking the regulation, we will seek an adjournment debate and ask the secretary for transport and housing to give a guarantee to come up with a draft regulation against fare bargaining,' said Mr Cheng.
Still, Wu Yim-chun, chairwoman of the Chuen Lee Radio Taxi Association, supports the government's approach.
'We agree that the law should be tightened against fare bargaining, but that can come later,' said Ms Wu.
'Such regulation should only involve a change in the subsidiary legislation and that is a straightforward thing to do. If the new fare structure turns out to be effective in containing discount gang activities, we would not need the regulation at all.'
For Mr Fung, there is no alternative but to stay in business, despite the double whammy of the discount gangs and the new fare structure.
'We will have to continue to raise objections,' he said.