Hong Kong outlined long-anticipated plans to regulate ride-hailing services, potentially limiting the scope of Uber Technologies in a city known for its poor taxi services.
Authorities intend to license platforms such as Uber and adopt tougher penalties for rule breaking, the Transport and Logistics Bureau said in a paper published on Monday. Taxi services would be improved through the introduction of so-called premium fleets, it said.
At the heart of the issue is the number of hire-car permits available for ride-hailing services. Currently there are only 1,500. Uber, which launched in Hong Kong a decade ago and has been unregulated since, has more than 10,000 drivers in the city.
Officials said they have no plans to increase the quota, the South China Morning Post reported.
Uber said it welcomed the government’s plan to regulate ride-hailing platforms, adding it is “critical” for the government to also come up with a workable licensing regime. Any move to cap the number of ridesharing licenses in the city would deal a blow to the many drivers who rely on the platform for flexible earnings opportunities, a company spokesman said.
Uber has long drawn the ire of Hong Kong’s taxi license owners, who have seen the value of their licenses go down. A taxi license is now worth HK$2.8 million ($480,000), down from about HK$7.3 million back in 2015. Authorities have barely sold any new licenses for 30 years, despite the population rising by about 1.5 million people, or 25%. There are some 18,000 taxis in circulation.
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Earlier this year, some disgruntled taxi drivers posed as Uber passengers in order to report them to the police. That prompted the city’s leader John Lee to warn people against conducting undercover operations.
Complaints about rude service, overcharging and dangerous driving have long dogged Hong Kong’s taxi trade, further putting pressure on the government to regulate ride-hailing while also introducing reforms to improve taxis.
Complaints against taxis lodged with the government last year rose 75% compared with 2022, while the number of traffic accidents involving taxis increased by 26%.
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Uber has in years past clashed with regulators around the world, as its phenomenal growth applies pressure on traditional taxi and transport businesses. While Hong Kong is a fairly small market for the San Francisco ride-hailing leader, the outcome of the dispute may help shape a framework for regulating the company elsewhere.
The Transport Department will conduct a study on commuter needs to help shape the new planned regulatory regime, according to Monday’s paper. The study should be completed within 12 months, it said. Lawmakers will discuss the regulatory framework on Friday in a panel meeting.
