Taxis in Hong Kong will speed up reform if Uber and other ride-hailing firms can compete legally

News that the Transport Department’s contribution to the Hong Kong smart city blueprint is an app, HKeMobility, which excludes arrival times for the MTR and major bus companies comes as no surprise. It is also very revealing. For one thing, it shows that Hong Kong’s transport authorities are not very smart.

But this is just the latest in a long line of implementation failures. Whatever happened to the proposed premium taxi scheme which was mooted in a paper to the Legislative Council more than a year ago? The idea was to grant 600 licences, spread evenly among three different operators, to provide an enhanced service at premium prices. The taxi trade liked the idea of higher prices, but saw no need for the new licences. Quelle surprise, as they say in France.

The latest wheeze to stagger out of the transport think tank is a scheme to discipline misbehaving taxi drivers. The proposed demerit point system covers 11 offences, which attract a different number of penalty points according to the deemed seriousness of the conduct. Drivers accruing 15 points in a given period would have their licences suspended.

The plan is being discussed by the Committee on Taxi Service Quality (yes, there really is such a body), and a public consultation will be held this year, with firm proposals being put to the Legislative Council in the first half of next year. If you believe that, I have nice bridge I can sell you.

I have generally good experiences with local taxi drivers, except for the occasional cab smelling strongly of tobacco because the driver was too lazy to get out to smoke a cigarette. But there are undoubtedly many black sheep and this is the umpteenth attempt I have seen over the decades to weed them out. I can confidently predict it will go nowhere, just like all the others. The functional constituency transport sector member of the Legislative Council, Frankie Yick Chi-ming – who relies on taxi trade votes to get elected – has already stated he will oppose the scheme unless it has industry support.

Looking into my crystal ball, I can foresee that during the consultation phase, the scheme will be either so watered down that it is ineffective or that it will not survive scrutiny when it finally reaches Legco. And if by a miracle it does survive, it won’t be enforced so we will all be back to square one anyway.

There is a simple solution to all this. I know from personal experience in Russia this summer that there is way to provide more consumer choice and curb taxi abuses at the same time. I am talking of course of ride-hailing companies. There are three household names in this sector: Didi Chuxing, which dominates the mainland market; Grab, which has a big share in Southeast Asia; and the American original Uber.

As my companion on the Moscow trip is based in the United States, she has the Uber app on her phone and we made extensive use of it during our stay in Russia. I have written before about such services from a theoretical perspective, but this was my first experience of actual practice. It was a revelation.

Logging on to the website immediately shows the location of all accredited service providers in the vicinity, it takes only seconds to agree on a price and pickup arrangements.

Moreover, passengers know the details of the ride – passenger, driver identity, vehicle, time, date, place, etc – are all logged automatically in a location remote from the trip itself, so they have peace of mind. Personal security is a very important issue, especially when visiting a country with which you are unfamiliar. Payment is fixed in advance and usually by pre-registered credit card, so there is no opportunity to overcharge.

Misconduct by taxi drivers is a global phenomenon, but the presence in the market of reliable alternatives helps to minimise it. We had been warned in advance about Russian taxi drivers and sure enough at the airport and outside every railway station, men in leather jackets and dark glasses were busy touting for business. The app meant we were no longer at their mercy.

Watch: Why are Hong Kong taxis in different colours?

So here is my suggestion for our transport authorities and the taxi committee: please do not waste our time and your effort on pointless consultation exercises which we all know are designed not to go anywhere. Take the 600 extra licences you were already planning to dish out for premium taxis and instead give 200 to each of the three leading ride-hailing companies.

Limit the validity period to no more than three years, so that we don’t inadvertently create another iron rice bowl franchise situation. Then just stand back and marvel at the result.

As has happened elsewhere, many taxi drivers will also register with the companies once the system is in operation. We will incidentally secure our premium service but, most importantly, the most common abuses will be squeezed out. We do not need complicated demerit schemes and half-hearted enforcement: market forces will fix it for us.

The taxi trade will no doubt threaten to block roads and adopt other tactics to obstruct implementation, at least at first. But we know how to deal with Occupy, don’t we?

Mike Rowse is the CEO of Treloar Enterprises. [email protected]