A way must be made for Uber in Hong Kong market

PUBLISHED : Saturday, 22 August, 2015, 12:27am
UPDATED : Saturday, 22 August, 2015, 12:27am

In Hong Kong's much-touted free market, there should be space for Uber and similar car-hailing services. They are, after all, increasingly popular and offer much-needed competition to the staid traditional taxi companies. Through mobile device apps, passengers are able to travel with greater comfort, convenience and certainty. Yet, authorities are so far having none of it; instead of finding ways to accommodate, there have instead been arrests of drivers and managers and the impounding of vehicles and equipment.

It was inevitable that authorities would respond - Uber is operating outside the government-licensed taxi system. Licence owners, who have paid up to HK$7 million on the open market, have for weeks been protesting about lost business and calling for enforcement of the law. With 18,138 taxis and 35 of the 208 votes for the transport functional constituency seat in the Legislative Council, they are a powerful force. Responding to rivals, they have promised better services.

Uber, based in the US and with more than US$50 billion from venture capital and loans, relishes such a response. It deliberately goes into markets to push sweeping changes through finding loopholes and, if necessary, legal challenges. Uber north Asia general manager Sam Gellman said on Tuesday the company wanted to work with the government to develop a new regulatory approach to transport. It is behind an online petition that has been signed by more than 55,000 people - a tactic that has been successful in some other cities.

The Secretary for Justice, Rimsky Yuen Kwok-keung, has said there should be "legal space" for Uber to continue to operate. No new taxi licences have been issued in Hong Kong for a decade. Passengers have long complained of drivers who are rude, refuse rides, drive dangerously and take longer routes.

Entrenched interests are bound to fight against the newcomers - that has been the response in many of the 57 countries Uber has moved into. But in some cities like San Francisco, Uber's hometown, there has been such overwhelming support that it is now the dominant taxi service. Driving the changes are technology-savvy consumers demanding efficiency, improved quality and convenience.

Taxis should be regulated; third-party insurance, the reliability and cleanliness of vehicles and the trustworthiness of drivers have to be assured. But maintaining a monopoly makes innovation and improved service less likely. Authorities should be trying to accommodate Uber and similar firms.