Premium taxi services a good move that will benefit consumers

Government should not hesitate to open the taxi market further to competition if operators can’t live up to public expectations

PUBLISHED : Saturday, 25 June, 2016, 10:34pm
UPDATED : Saturday, 25 June, 2016, 10:34pm

Consumers stand to benefit from market competition, even more so when it is driven by innovation and technology. Take Uber and other car hailing apps as an example. Although they operate outside the law in many countries, their limousine services are considered by many as better than taxis in that they are more convenient and offer value for money. The services have become so popular that governments and taxi industries cannot simply sit back and do nothing.

The premium taxi service announced by the Transport and Housing Bureau appears to be an option worthy of consideration. Under the proposal, the market will open up to three new franchisees, each of which will operate a fleet of 150 to 200 vehicles fitted with Wi-fi, chargers and more legroom. The fares are likely to be higher than the existing ones.

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Given the number of taxi licences has been capped at around 18,000 for years and that each is worth as much as HK$6 million now, any step to open up the market may upset vested interests. A strong reaction from taxi owners is to be expected. But the threats to burn tyres and block roads and the airport are hardly in the public interest. The operators risk alienating themselves further from many who are already critical of their poor service. They should seek to win support through service improvement instead. Credit goes to some operators for rolling out an enhanced service, which allows passengers to book taxis and rate drivers’ performance through a mobile phone app. They have demonstrated their willingness to stay competitive and adapt to changing times.

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The Hong Kong government is not alone in grappling with the challenge. Whether the answer lies in offering extra legroom and Wi-fi for passengers remains to be seen. But the provision of premium taxi services through franchises at least gives officials some influence over service requirements and quality. Officials should not hesitate to open up the market further if the industry cannot live up to public expectations.