From taxi drivers to its leaders, Hong Kong must join the digital revolution, but also beware of the risks
David S. Lee says it’s time for Hong Kong, a laggard in welcoming technological advances like mobile payments and driverless cars, to play catch-up, while considering the impact of such change
This seemingly small difference in payment preferences is a microcosm of the growing technological gap between the two markets, but it also portends impending changes that raise critical questions.
Conversely, only a fraction of Hong Kong’s approximately 18,000 taxis are equipped for cashless payment, usually through Alipay or WeChat Pay.
Alipay and WeChat Pay now available in some Hong Kong taxis
What’s holding Hong Kong back from becoming a smarter city?
Beyond poor taxi service and limitations with payment methods, there are larger issues to be addressed in the adaptation of new technologies in Hong Kong, such as job loss, data privacy and Hong Kong’s integration with mainland China.
All these seem to be missing from the debate.
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When such technology eventually reaches Hong Kong, changes to the labour market will inevitably follow as taxi and truck drivers are replaced by driverless vehicles. Consequently, there will be a loss of unskilled jobs that could exacerbate Hong Kong’s economic stratification.
Another likely result is a change to the government’s taxi licensing regime. Because of the limited number of taxi licences available, for years Hong Kong taxi owners have been able to monopolise the market and keep the prices of licences artificially high. With the advent of the new technology, however, their ability to continue collecting monopoly rents will be disrupted.
Hong Kong’s taxi trade must face up to competition and technology
Alibaba’s financial arm, Ant Financial, is developing a social credit score based on a user’s transactions, online behaviour and network interactions, which will provide a financial credit profile. Beijing has expressed a desire to roll out its own national social credit system by 2020.
After shopping, travel and health, China’s digital revolution has the tax system next in its sights
Technology-induced changes are affecting and will continue to affect traditional customs like the exchange of red packets and everyday activities like taking a taxi. While such digital transformations will make life more convenient for Hong Kong residents, the associated costs of such convenience will require consideration by Hong Kong’s regulators, civic leaders, policymakers and, most importantly, its people.
As Hong Kong continues its seemingly inexorable assimilation into mainland China, its residents will become more integrated into various forms of digital governance.
Perhaps such a change is inevitable, and even welcome by some, but with so much of Hong Kong’s political discourse focused on the socio-economic disparities in the city as well as its relationship with mainland China, awareness and thoughtful discussion of these issues is warranted, sooner rather than later.
There is so much more at stake than just the cash.
David S. Lee is a senior lecturer at the University of Hong Kong’s Faculty of Business and Economics