Hard Drive
Hong Kong should not set any limit on the number of vehicles licensed to provide ride-hailing services. Every owner of an electric vehicle which complies with the regulations should in principle be able to obtain one on demand with payment of the requisite fee. The owner, and their spouse, should also be able to obtain a permit to drive that vehicle. Normal market forces, together with the fees and various other licensing requirements, will be sufficient to find the right balance.
I have been making a lot of use of ride-hailing recently. Knee replacement surgery has restricted my mobility so I have had a greater need for reliable point to point transportation. I think that makes me as well qualified as anyone else to comment on the government’s latest set of proposals for regulating ride-hailing services. The experience has been instructive.
The booked vehicle has invariably arrived at the promised time. It has been modern, clean, in good condition and odourless. The driver has generally been younger, very polite and with good command of English. We proceed forthwith to the desired destination.
Normal taxi use has continued where suitable. The drivers have generally been older (some even longer in the tooth than this columnist) and most vehicles somewhat tired in appearance. It should be added in fairness that there are now some modern taxi vehicles and some younger drivers, and these are welcome. Courtesy, ability to use modern technology for route finding etc, and English levels all variable. There is still a reluctance of some urban taxis to cross the harbour, but overall it could be said the taxi service has improved in recent years.
The Transport Bureau circulated a discussion paper on Monday last week for consideration at a special meeting of LegCo’s Transport Panel the following day. The paper was in Chinese only at first though an English version did become available after the meeting. The paper was to give an outline of the government’s latest thinking on implementation following enactment of enabling legislation in October last year.
The background as reported in the paper was interesting. It said that taxis now had a78 per cent share of the point to point market, and ride-hailing vehicles the balance of 22 per cent. There were an estimated 114,000 ride-hailing trips per day. These figures are remarkable bearing in mind that the various platforms offering these services have been operating in a legal grey area in the face of administrative caution and an official pro-taxi bias. It is only public demand for a better service and a determination to secure it that has given rise to the growth of the alternative.
The key findings in respect of ride-hailing drivers were that between 60 and 70 per cent of them operated for fewer than 20 hours per week. Some 20 per cent operated for between 20 – 40 hours per week, and only 10 – 15 per cent on a full time basis.
Most of the ideas set out in the Legco paper seem sensible. Ride hailing platforms must register and meet various requirements. They will be given renewable licences valid for five years. There is no reason to think the four existing operators – Uber, Tada, Amap and Didi Chuxing – would not be able to qualify. The only caveat here is the requirement for extraordinary amounts of detailed operating information to be given to the Transport Department on a continuous basis in addition to basic data on drivers and vehicles. (Number of bookings received, completed, cancelled, fares charged, number and nature of complaints received etc).
Ride hailing vehicles will require a separate licence. They must be less than 12 years old when first registered and will be subject to annual inspection. There is at present no requirement for them to be powered by electricity; this is an omission.
Drivers will have to pass a special test to be licensed.
The whole emphasis of these various licensing conditions as applied to vehicles and drivers is to bring them into line with those applicable to licensed taxis. On the surface this seems fair and is no doubt designed to deflect complaints from the taxi trade. There is also a suggestion to ensure the new licences are actively used and not left idle, which seems an odd danger to guard against.
The paper stresses that the taxi service and ride-hailing are complementary and should co-exist. The objective should be to provide a people-oriented safe regime.
The most controversial issue outlined in the paper is the question of whether there should be overall control of the total size of the ride-hailing fleet. The justification given is to prevent vicious competition and minimise traffic congestion. The paper says there should be a limit but declines to set one. As might be expected, different industry figures have suggested widely varying figures.
Uber has said its existing workforce includes 30,000 active drivers, and a quota less than that could result in higher fares and reduced service. A serving lawmaker has suggested that mathematically 15,000 licences would be required just to maintain the existing level of service. A former lawmaker proposed a higher cap of 20,500. Taxi interests have said that even 10,000 would be far too many.
My fear here is that once again the administration will buckle in the face of opposition from the taxi trade and set a number far too low to preserve existing service standards. The excuse will be that by setting a low figure to start the government can monitor the situation and adjust the number later if justified. But why are we setting a limit at all? Getting the necessary licences for the vehicles and drivers will take time and cost money. Taking into account the pattern of hours worked, only those satisfied they can cover the costs will seek to qualify. We should let them.
To protect taxi driver incomes, far better to encourage the whole of the existing fleet (some 18,000) to register with the technology platforms.