Uber can drive a taxi revolution in Hong Kong
Albert Cheng says the car-hailing app can only be good for customers and drivers in the long run, as more competition will mean improved services and cheaper licences
A recent sting operation by Hong Kong police saw five Uber taxi drivers arrested and their cars detained for illegal use as vehicles for hire. The police also raided Uber's offices and detained three staff members.
The business model of the car-hailing app, which combines information technology with quality service, has disrupted the traditional taxi service and has been well received by users around the world. Uber's service is now available in more than 300 cities, and the company is valued at US$50 billion.
Uber has operated in the grey legal area and caused controversy in many places, since it apparently threatens the vested interests of the traditional taxi sector. Taxi drivers in some regions, in response, have staged large-scale protests and even filed a class-action lawsuit against Uber.
The high-profile action of Hong Kong police is an obvious move to safeguard the vested interests of the taxi sector, because if the service continues to eat up market share, prices of taxi licences are certain to plunge. The government has not issued new licences since 1994, contributing to an unreasonable surge in prices. A taxi licence now costs over HK$7 million, meaning the 18,000 licences currently in the market are worth about HK$126 billion.
Local passengers have been put off by taxi drivers' poor attitudes, refusal to take them to their destinations, unreasonable fare charges during bad weather and other undesirable behaviour. If the traditional taxi service had been satisfactory, passengers might not have used car-hailing apps. In contrast, Uber not only makes use of its mobile app to connect drivers with passengers, but also charges the exact fare shown. In some regions, it also provides passengers with information such as drivers' appearance, health conditions and vehicle details.
If the traditional taxi service had been satisfactory, passengers might not have used car-hailing apps
In the face of competition, the taxi sector should increase its competitiveness by improving service standards and providing more information instead of demanding the government strengthen regulation or kick competitors out of the market. At the end of the day, it's up to the consumers to decide whether the service is worth the money they pay. It would not be a bad thing if charges were laid against Uber, which has expanded its business not only to Hong Kong but also on the mainland and in Taipei. If Uber were to win the lawsuit, the case would be looked on favourably elsewhere.