Mainland China on right track by laying groundwork for legalisation of online ride-hailing services

Hong Kong cannot escape what is a worldwide trend and must come up with answers on how old and new models of the taxi industry can coexist

PUBLISHED : Wednesday, 30 March, 2016, 11:14pm
UPDATED : Wednesday, 30 March, 2016, 11:14pm

The rise of the internet and smartphones has nurtured a growing demand for services that are just a click away. From grocery shopping to booking a taxi, everything can be done instantly online nowadays. The trend has brought convenience and comfort to customers. But it also poses challenges to conventional business models. The pressure to shake up the taxi industry is a case in point.

In a bold but right step forward, the central government has paved the way for the legalisation of Uber and other ride-hailing services by scrapping the 18-year-old taxi regulations on the mainland. The move has effectively given local authorities a free hand to introduce new players to the industry. Some cities have removed taxi franchise fees already.

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The emergence of app-based limousine and motorbike services is as much a challenge to taxi operators as to governments the world over. With their easy-to-use and often cheaper services, Uber and other operators have effectively broken the monopoly of a staid industry. Customers’ feedback has been generally positive.

Over the years, taxi drivers have responded by taking to the streets. The latest one, in the capital city of Indonesia, erupted into a violent protest. The frustration is understandable, but the popularity of rival services makes a total crackdown impractical.

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Hong Kong’s taxi drivers are rolling out enhanced services in the wake of growing competition. Whether they can fend off the challenge remains to be seen. What is certain, though, is that the trend for online taxi bookings cannot be reversed.

There is perhaps room to accommodate both models, with app-based limousines restricted to online booking. Passengers can continue to flag down licensed taxis in the street.

Our government has yet to come up with a clear position on the way forward. The direction on the mainland has provided good reference. The competition brought by new players has clearly brought more benefits than drawbacks. Legalisation seems inevitable.