One of the city's most popular tourist destinations has become a hunting ground for unscrupulous taxi drivers who are flouting the law right under the nose of police.
Taxi drivers at the Peak Tram terminal in Central are illegally charging tourists more than four times the metered fare to make the journey to The Peak.
"Police don't seem to do anything at all. They don't seem to care," said Callan Anderson, a businessman who works in an adjoining building to the Garden Road terminus.
"Often the drivers don't even have a licence on the dashboard. Every fourth cab I get, the licence is not there," said Anderson.
"I've heard of people being charged HK$350 or HK$450." He says the problem has worsened in the past year, with an influx of mainland tourists providing "easy pickings" for dishonest drivers.
An employee at the Peak Tram terminal, who identified herself as management staff, insisted there was no problem with illegal taxis at the tourist hotspot.
However, the Sunday Morning Post found recently that every taxi idling in front of the building's entrance was demanding an off-meter charge of at least HK$200 to make the trip to the island's highest viewpoint. A typical metered fare costs about HK$50.
The queue of about 10 taxis was idling directly in view of Peak Tram staff as well as police officers in the vicinity. A police officer at the scene acknowledged the problem of taxis operating illegally, but disagreed that every driver there was preying on unsuspecting tourists.
From time to time, police mounted undercover investigations to root out such behaviour, the officer added.
A spokesman for Peak Tramways said the company was aware of the problem and was working closely with police to address the issue.
"We hope that this practice of illegal taxi touting can be stopped as we believe it could affect Hong Kong's reputation as a tourist destination," said Perry Wong, sales and marketing director for Peak Tramways.
In the first six months of this year, police arrested eight taxi drivers for "overcharging" and issued 23 summons for "touting" and "refusing hire" in Central, according to official figures.
In May last year, a taxi driver who charged undercover police officers HK$150 for taking them from the Garden Road tram terminus to The Peak was jailed for two months and fined HK$7,000.
The number of people attempting to take the Peak Tram has skyrocketed in recent years, leading to long queues and frustrations among both tourists and residents wishing to use the service. The taxi "touts" take advantage of tourists who do not want to wait in the queues.
"We saw the line and decided to come back tomorrow early in the morning," said Yuval Moskovich, an Israeli tourist.
Between 1997 and 2007, the annual number of passengers on the Peak Tram doubled to four million. Last year, the tram recorded 6.27 million passengers, according to company figures.