Hong Kong’s taxi industry has made a desperate appeal to the government for an operations upgrade as competition from a proposed premium taxi scheme looms, on top of a bitter rivalry with ride-hailing service Uber.
A group of cabbies vented their anger on Tuesday by smashing two taxis with hammers outside the Department of Justice in Central on Tuesday morning after about 150 of them protested outside the Chief Executive's Office in Admiralty, slamming the government for not taking action against online hailing services, which had harmed their incomes.
Authorities are set to introduce a draft to the Legislative Council before the summer recess, centred on the trial launch of 600 franchised taxis from three operators which can charge up to 50 per cent more in fares.
An industry group urged Secretary for Transport and Housing Frank Chan Fan to publicly promise that the city’s 18,163 taxis would be allowed to be upgraded to luxury cabs, if the five-year trial scheme was successful. The group said it would do anything to oppose the proposal, if their demands were not met.
“The government is actively preparing for the bill to introduce franchised taxis, targeting to do so in Legco by the 2018-19 year,” a spokeswoman for the Transport and Housing Bureau said. “Subject to the passage of relevant legislation, the government will hold an open tendering exercise for interested parties to bid for the operating rights for franchised taxis.”
Under the proposed scheme, each of the three franchise operators will 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 rates.
A franchised taxi operator must offer online hailing services such as on apps, and have vehicles no older than five years. At least half of the fleet must also have wheelchair access.
The project aims to offer passengers a premium service, and give them an alternative to the existing system, as customer discontent grows over the bad conduct of drivers, with complaints of overcharging, cherry-picking of passengers and unnecessarily long rides.
According to government data, the taxi sector has suffered a decline of 16 per cent over the past 10 years, from about 1.07 million passenger trips daily in 2008 to 897,000 in 2017.
Chairman for the Association of Taxi Industry Development Chan Man-keung admitted they had softened their stance on the franchised taxi scheme as a crisis loomed in the form of increasing competition from ride-hailing firm Uber and persistently bad comments from the public.
“We’ve started to feel that Uber is causing our business to dry up. From what I gather, the Christmas turnover last December suffered a nosedive as passengers preferred to call Uber instead of a taxi. We really feel a growing sense of crisis,” he said.
We’ve started to feel that Uber is causing our business to dry up
Chan Man-keung, Association of Taxi Industry Development
He pointed out that at present the vacancy rate of taxis had gone beyond 10 to 20 per cent, a record high compared with just over 3 per cent previously, as many cab drivers had been lured into working for Uber.
Uber’s ride-hailing service is illegal in Hong Kong, despite calls from the Consumer Council to legalise this. But the government has been accused by taxi industry supporters of not coming down hard enough on Uber drivers.
Chan also blamed authorities for the taxi industry’s image woes, saying they had failed to crack down on bad apples within the sector.
He called on the transport minister to openly assure that the franchised taxi scheme would be applied to existing fleets if the model proved successful.
“Frank Chan has promised us in a private meeting that the ultimate aim of the scheme is to eventually upgrade the existing taxi fleets into premium taxis. We hope that he can make an open assurance to us with an achievable road map so it will provide an impetus for us to improve our service,” he said.
The bureau’s spokeswoman stressed that the government did not rule out any firms bidding for the franchise plan.
“The government welcomes any companies, including existing taxi operators, to bid for the operating rights,” she said.
The government welcomes any companies, including existing taxi operators, to bid for the operating rights
Transport and Housing Bureau spokeswoman
However, Wong Po-keung, chairman of Hong Kong Taxi Owners’ Association, warned that the industry would be dealt a severe blow if the scheme was eventually passed in Legco as more cabbies would switch to working in the luxury fleets.
“At present the taxi sector has already suffered an acute shortage because young people are reluctant to work as drivers. The premium taxi scheme is set to aggravate this manpower problem,” he said.
Wong argued that Hong Kong did not need the trial scheme, saying there were already luxury taxis on the roads at present and the government only had to upgrade such services under a new regulatory system.
“There are already premium taxis available by firms such as SynCab. Why doesn’t the government incorporate them in a new regulatory system and allow them to charge higher fares for premium services?” he asked.
Liberal Party lawmaker Frankie Yick Chi-ming, representing the transport sector, said he stood firm against the franchised taxi scheme. He echoed Wong’s comments, calling on the government to upgrade existing premium services so such operators could charge higher fares during peak hours, provided they fulfil certain requirements.
“It’s like the model of allowing red-top minibuses to turn into green-top ones if they can meet certain licensing criteria. This can provide incentives for cabbies to improve their service and run their own business,” he said.
Yick insisted that the 600 premium taxis planned under the draft legislation would not address problems plaguing the industry.