Jake's View

Uber issue is about politics, not about defying regulation

If the ceiling was abolished and taxi licences were made available to everyone who meets the qualifying requirements for car and driver, the speculative bubble would pop, ride-hailing apps would abound and our taxi problems would vanish. But it will never happen and the reason is a showcase example of why denying democracy makes us all poorer

PUBLISHED : Saturday, 10 June, 2017, 11:08pm
UPDATED : Sunday, 11 June, 2017, 1:42am

“Some companies are just not willing to be regulated under established mechanism. They hope they can run their businesses and not come under any regulations. I believe that no country and no government would allow that.”

Anthony Cheung Bing-leung,

Transport secretary,

SCMP, June 8


I have a suggestion, Professor Cheung. Let’s put it to the test. Let’s ask the people at Uber taxi whether it is really true that they are unwilling to accept any regulation of cars made available for public hire.

You call the stakes, Sir. I’m on a winner here. Just ask Uber whether this is really true and then I shall collect my bet from you.

The big obstacle is not regulation but regulation gone bad. It is that to get a taxi licence you must pay HK$7 million to an existing holder of one. This is not the cost of the car. It is just the speculative value of a taxi licence as quoted on the market. The holder, a parasite on the travelling public, does nothing for it.

The problem is easily fixed. All we need to do is abolish a 20-year ceiling of 18,400 taxi licences, and make them available in the future to everyone who meets the qualifying requirements for car and driver. The speculative bubble in taxi licences will pop, ride-hailing apps will abound and our taxi problems will vanish.

But it will never happen and the reason is purely political, a showcase example of why denying democracy to Hong Kong makes us all poorer.

Hong Kong puts brakes on Uber in its road map for the future

We start with the fact that our rotten boroughs, the functional constituency seats in the Legislative Council, are one of Beijing’s essential tools of administrative control.

For instance, while a motion introduced by the administration needs only overall majority support for approval, a motion introduced by any member of Legco must have majority support of both the geographic and functional constituencies.

Thus on Thursday an anti-Beijing motion on the June 4, 1989, incident gained a majority of 25 to 23 but did not pass as the functional constituencies voted against it 14 to 9.

Beijing does not control all of the functional constituencies, of course. The lawyers go their own way. But this only makes Beijing all the more protective of the seats it does control and one of the most easily controllable among these is the transport constituency.

It has only 208 voters and 40 of these are taxi-owning companies, a voting bloc that has a further 23 sympathetic votes in minibus companies. The MTR has one vote. The owners of those speculative taxi licences control the transport seat outright.

Surge of support for Uber as Hongkongers post messages in favour of ride-hailing app following drivers’ arrests

Now if this were a democracy, the chief executive could say, “Friends, this will not do. With 18,000 odd licences at HK$7 million apiece we have speculative bubble of more than HK$120 billion carried on the backs of taxi drivers who must pay their owners up to HK$440 a shift. We are going to abolish restrictions on the number of taxis and eliminate this bubble. If you taxi owners don’t like it you can stand against me at the next election and we shall ask the voters whether they should continue to pay for an imposition that benefits only you owners and that you were never formally granted.”

Oh, how I would love to fight an election on an issue like that.

But if done under our present system of government the taxi owners would simply ask for a private back room meeting with the chief executive and say, “Do it and the transport seat will vote with the pan-dems on the next June 4 motion.”

Which is something Beijing could never allow to happen and which explains why this speculative mess we have got ourselves into with taxis can never be resolved. That’s the price of shutting out democracy. Anthony Cheung must know it and it is why we should dismiss his sanctimonious talk of Uber defying regulation as a misleading diversion from the real issue.