Set Fair
This week marks the third anniversary of John Lee Ka-chiu taking up the office of chief executive, with just two years to go in the current term. I wonder if we are getting close to a sensible resolution of Hong Kong’s taxi/hire car situation. Though I am by nature an optimist, on the basis of past form I find it difficult to be confident.
After all, 2025 also marks the eleventh anniversary of Uber setting up in Hong Kong. Yet here we are, after two chief executives have come and gone and more than a decade has passed, a company known around the world for offering a quality transport service still operates here in a legal grey area without a proper regulatory framework. It and equivalent companies operate smoothly around the world, including in all our competitor cities in the region.
But let’s start with the taxi situation. I am not going to join in the general chorus of complaints about poor service, overcharging, dangerous driving, geriatric drivers etc for two reasons: first, these have been well aired elsewhere for many years and there are mechanisms for addressing them, albeit of doubtful efficacy. And secondly because I have always received reasonable service. Possibly because of my crewcut hairstyle and use of Cantonese in giving directions, the drivers assume I might be a retired police officer and are worried I could still have friends in the force.
But take the basic point that a quarter of the way through the 21st century the vast majority of our taxis still require payment in cash. We say we are going all out to attract tourists from around the world but our own marketing material advises potential visitors to bring cash if they plan to take a taxi. I know there is a programme that starting from January next year all cabs must have installed equipment for accepting payment by card. But why has it taken so long? And what assurance do we have that passengers in future will not be hearing the Cantonese equivalent of “Sorry Gov, the machine’s on the blink, is it OK if we just settle this one in cash?”
Part of the problem of dealing with the taxi service arises from the different interests at play. Most owners of taxi licences are basically investors who just want to maximise returns on the money they put in to acquire the licence and buy the vehicle. Most drivers just rent the vehicle for a day or shift and work on a cash basis. But there are also some owners who drive themselves for one shift then rent out the vehicles to others for the rest of the day. At one time this was a recognised way for an ordinary person to become a mini capitalist: borrow from the local chit fund to buy a licence, work like a demon to pay off the loan, then make a reasonable living. When you retire just sell the licence and that’s your pension. My own brother-in-law followed this route and now enjoys a comfortable retirement.
But somewhere along the way trade in taxi licences became a speculative business. The price of a licence reached the astronomical level of $7 million which could not be supported by income from taxi operation. Changes in the market have reportedly reduced this sum to below $2 million. Pure owners have definitely lost out especially if they bought in at the top of the market. They resist any change to the travel arrangements that might further reduce the value of the licence. Somehow they have managed to convince some drivers that their interests are aligned, which makes any proposed changes potentially controversial. This is despite the fact that anecdotal evidence suggests drivers who join up with Uber actually increase their income.
For whatever reason successive administrations have pursued what can only be described as an ABU policy (“Anything but Uber”}. Who now remembers the “Luxury Taxi” proposal propounded by then policy secretary Frank Chan Fun. When this was shot down by the legislative council at the time, it was replaced by the points system which was supposed to curb the bad behaviour by penalising drivers who accumulated too many substantiated complaints. That didn’t work so we now have the “taxi fleet” plan where five companies are in the process of bringing a total of 3500 vehicles into a premium operation. As I have pointed out before, all these taxis are cannibalised from the existing fleet, there is no net increase in total number.
The administration has indicated it will bring forward a paper in the second half of this year setting out a road map for ride hailing services. Meanwhile enforcement action continues to be taken against some private drivers. It is important to realise these are not violent criminals, just honest working people trying to make a living in tough times. But taxi associations continue to call for tougher measures. The paper will be an opportunity to bring Uber and similar operations firmly within the big tent of the authorised transport family. Other places have managed this without difficulty. Unfortunately, it will also be the opportunity for another policy fudge. Perhaps “it is too early to assess the merits of the premium taxi service, a further period should be allowed for the experience to bed down and show what it can do.” The script practically writes itself.
Some might say I am getting cynical in my old age and should have more confidence. But after a decade of disappointments that is a struggle. I really would be delighted to be surprised on the upside.