Move full speed ahead with franchised taxi scheme

The traditional taxi industry has come up with its own six-point plan to improve service but it’s too little, too late

PUBLISHED : Sunday, 30 April, 2017, 11:50pm
UPDATED : Sunday, 30 April, 2017, 11:50pm

Hong Kong’s taxi operators have tabled a reform package in a last-ditch attempt to ease mounting pressure to open up the much-criticised industry. Some of the ideas are well-intentioned, but they cannot replace the franchised taxi scheme proposed by the government. That it has taken so long for the industry to come up with its own reform initiatives is regrettable. Passengers have long been complaining about the declining quality of service and have opted for Uber and other point-to-point vehicle services operating outside the law in recent years. This in turn has put pressure on transport officials to address the situation.

The highlight of the six-point package by the industry is a demerit system, under which drivers who repeatedly provide bad service are to be suspended for a certain period. The review, tabled by lawmakers for discussion in a Legislative Council panel meeting, also seeks to attract new blood and strengthen professional training.

Some proposals, however, are apparently self-serving. This includes allowing fleets with better performance to upgrade as premium taxis and charge more. It begs the question of why the industry keeps resisting new franchisees but sees no problem for existing players running a premium service similar to the government’s proposal.

It is nonetheless good that the operators also recognise that they can no longer turn a deaf ear to the public clamour for change. The proposals would not have been raised if there had not been pressure to open up the industry. It shows that competition is an effective way to improve service standards.

The number of taxis in urban areas and the New Territories has been capped at 18,000 since 1994, lagging far behind the escalating demand for such services over the past two decades. The situation is further complicated by the fact that neither the issuance of taxi licences nor drivers’ income is tied to service quality. The result is that drivers may be rude, cherry-pick passengers and even overcharge.

The government has been quick to dismiss some of the proposals put forward by the industry, saying it has no legal basis to impose penalties on licensees with poor performance. Raising the maximum punishment on illegal practices such as overcharging may not have a major impact either, as it involves technical enforcement issues.

That leaves no alternative but to introduce new players into the market. The proposed franchised taxi scheme is worthy of support as it would help meet the demand for better service while prompting existing operators to clean up their act.