• Sun
  • Oct 26, 2014
  • Updated: 4:01pm
NewsHong Kong

Hong Kong taxi owners promise drivers fare share of price hike

Cabbies complain previous rises disappeared into operators' pockets. This time, deals are struck as government approves price increase

PUBLISHED : Thursday, 26 September, 2013, 12:00am
UPDATED : Thursday, 26 September, 2013, 8:51am

The extra money cabbies are set to make when higher fares kick in at the end of the year will not all end up going to taxi owners in higher rents under deals struck between the two sides.

It follows complaints that previous fare increases left drivers no better off because owners raised rental fees at the same time.

This time, some owners have agreed to split the rise, while another group has agreed not to raise rents at all for the first three months. However, one drivers' representative warned none of the deals had been set in stone.

On Tuesday, the government approved an application for taxis to raise flag-fall charges by HK$2 from December. That means the minimum fare for urban taxis will be HK$22; for New Territories taxis, it will be HK$18.50; and for Lantau cabs HK$17.

For every 200 metres after the first two kilometres, HK$1.40 will be added - a rise of 10 cents.

Lai Ming-hung, of the Taxi and Public Light Bus Concern Group, said some taxi rental companies had agreed to split the extra revenue with drivers. "So, for the flag-fall increase of HK$2, drivers should get HK$1 and owners should get HK$1."

He said that meant a rent rise of no more than HK$50 a day on the current HK$800. "If they don't keep their promise, I will protest at their doors," Lai said.

Wong Po-keung, of the Hong Kong Taxi Owners Association, said its 1,000 members had agreed not to raise rents for three months following the fare increase, the first since July 2011.

"In March, we'll talk to drivers and see how they are doing, and then we will see whether they can afford a higher rent," he said.

Wong said 85 per cent of the association's members represent owners who have only one taxi. "If the drivers can't make ends meet, it's not good for us as well," he said. He added that after three months, "at most, we will increase our rents per shift by HK$10 to cover our administrative and maintenance costs".

These small operators tend to charge lower rents anyway, with daytime cabbies paying about HK$380 a shift, and night-time drivers paying HK$350, he said.

Choi Keung, of the Taxi Associations Federation, said none of the deals were formal, and owners could still change their minds.

With no new urban or New Territories taxi licences issued since 1994, speculators have jumped into the market in recent years. According to the Taxi Exchange brokerage, a licence cost HK$6.7 million this month, coming down from the record high of HK$7.1 million in May.

Figures from the Transport and Housing Bureau show licences for the 15,250 urban taxis are in the hands of 7,788 people, and 1,253 people hold licences for the 2,838 New Territories cabs. The 50 Lantau taxis belong to 43 owners.

Dr Hung Wing-tat, a transport analyst at Polytechnic University, said the fare increases would further push up the licence prices. "It's like investment in the property market. If the future looks promising, it will go up."


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This is all completely out of whack.

Flag fare history for red urban taxis:
November 2008: HKD 16 => 18 (12.5%)
July 2011: HKD 18 => 20 (+11.1%)
December 2013: HKD 20 => 22 (+10%)

So in under 5 years, we have gone from HKD 16 to 22. That is +38%, or a rate of 6.6% per year. Is petrol cost going up by 6~7% pa? Are labour costs? Vehicle costs?

Nope. The only thing that has risen astronomically is the price of a taxi licence (to about HKD 7~8m these days). And make no mistake, despite their hollow reassurances, of course the bulk of this fare increase will go to the licence owners. The licenses are the scarcer resource here. Vehicles are not in short supply, and with all due to respect to taxi drivers - it is not rocket science, so labour is not the bottleneck here either.

The real issue here is the that the cronies of the Transport Department have kept the number of taxi licences at the same level since 1994. It is hard to believe, but for 20 YEARS not a single new license has been issued.

Meanwhile, our population has grown by some 900,000 people, whole new towns and a new, relatively far-away airport have been built, and many kilometres of road opened. Yet, the number of taxis = the same.

Who benefits? Not the public, and not even the cabbies (whose pay has only modestly risen in five years). The biggest winners are those 8,000 licence owners.

And so we slide another little bit further down to Destination Banana Republic.
Do you have any suggestions on how to force taxis to drive to other areas or how to make taxis cleaner?


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