Steering carefully towards change in the taxi industry

The arrival of Uber has stirred protests among the city’s cabbies, even as the public look for better service. The trick will be meeting the demands of both sides

PUBLISHED : Saturday, 18 March, 2017, 3:34am
UPDATED : Saturday, 18 March, 2017, 3:34am

Just as a magistrate convicted and fined five Uber drivers HK$10,000 each for sharing rides without a permit or proper insurance, the government unveiled an update of a plan for a franchised premium taxi scheme to meet public demand identified by the ride-hailing service. But Uber needn’t have worried. Yesterday at least 200 taxis surrounded government headquarters at Admiralty to oppose the scheme, which the industry sees as unfair competition. The disruption to the market initiated by the ride-hailing service is far from over. Eventually the consumer stands to benefit from real reform, but the government will have to be careful of the impact on multi million dollar investments in taxi plates.

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According to the updated plan, the premium taxi scheme would consist of three 200-car franchises charging higher fares for better service and offering online booking services such as apps. But a protest organiser said it was unnecessary because many drivers were willing to improve service, with better regulation and consultation.

Sentencing the Uber drivers, principal magistrate So Wai-tak said: “Passengers entrust their lives to the drivers . . . issues such as the mechanical state of [unregulated hire cars] and insurance cannot be assessed.” That is a touch ironic, given complaints about taxis being in poor mechanical and general condition, and that the drivers – an ageing occupational group – are rude or simply drive poorly.

A big problem in Hong Kong is that taxi licences have been bought purely as investments. Any change will have serious implications for many people. Not a few drivers may be otherwise unemployable because of age. As a result the industry is powerful and officials need to be careful not to provoke protests that disrupt traffic, or worse.

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However, more competition and technology-driven service improvements would be good for the industry and its customers. Punishing Uber drivers is not going to change much, as evidenced by their prompt notice of appeal and a declaration of support from Uber, which is known for deep pockets and an appetite for litigation. People who see taxi licences as investments should be mindful that whether by market forces or regulation, things will change. After all, in the not too distant future we will have driverless cars.