Hong Kong makes it easier to bid for premium cab franchise but taxi trade says plan not fixing industry’s problems

It says ageing workforce and unsatisfactory service standards not addressed

PUBLISHED : Thursday, 09 March, 2017, 6:42pm
UPDATED : Monday, 02 October, 2017, 3:12pm

The government has tweaked its premium taxi trial scheme to make it easier for taxi operators and even ride-hailing services company Uber to bid for a 200-fleet franchise which can charge up to 50 per cent more in taxi fares.

However, the revised scheme has failed to win support from the taxi trade which described it as barking up the wrong tree and making “much ado about nothing”.

Under the revised plan, an employment relationship with the fleet’s drivers is no longer mandatory, after the government took into consideration the taxi trade’s earlier feedback, a government source said. But companies which can provide such an arrangement in the franchise operation could achieve higher scores in their tenders, the source added.

“The same favourable assessment will also be given to operators which have local experience in running taxi fleets,” the source said. “The scheme is open for anyone to apply, especially for current taxi operators and even Uber.”

The source added that Uber’s existing ride-sharing business model would not be allowed in the public transport market.

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The government expects to introduce a bill to the Legislative Council next year, detailing the terms and conditions in the tender process for the five-year franchise scheme which will involve a total of 600 premium taxis, now renamed as “franchised taxis” to avoid any row over labels.

But the government source admitted that the authorities had no clue when the plan would take effect as it was subject to Legco’s approval.

According to a government paper submitted to Legco’s transport panel yesterday, the revised trial scheme would comprise three taxi-operating franchises. They will each have 200 taxis charging higher fares, ranging from HK$32 to HK$36 for fixed start fees, about 35 to 50 per cent higher than current fares.

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A franchised taxi must offer online booking services such as on apps, and be no older than five years. At least half of the fleet must also have a wheelchair access.

The project aims to offer passengers a premium service, and give them an alternative to the existing system made up of 18,000 ordinary taxis, as discontent grows over the bad conduct of drivers, with complaints of refusal to pick up passengers, cherry-picking them, or taking a longer route.

But the spokesman for the Association of Taxi Industry Development, Chan Man-keung, said the scheme did not address the industry’s problems of an ageing and insufficient workforce, and unsatisfactory service standards.

“The creation of 600 new taxis would not help raise the service standards of the 18,000 cabs in Hong Kong. Actually, some taxi operators have already introduced some fleets of premium taxis. Why the government is refusing to impose a regulatory framework on those taxis is really beyond me,” he said.

Legislator Frankie Yick Chi-ming of the Liberal Party shared his view, saying the scheme would only aggravate road congestions and defeat the government’s purpose of containing vehicle growth.

For taxi operators interested in the tender, the government source noted that franchisees do not need to pay for a taxi licence, whose market price is about HK$6.5 million now, but they will need to fork out a franchise fee.

Interested parties will need to state how much they are willing to pay for the franchise, and the government will decide after their submissions.