Hong Kong cabbies call plan for premium taxi fleet unfair to small operators, unworkable due to lack of drivers
- Government bill encourages taxi operators to provide quality service by forming professional fleet management team, offering luxury vehicles
- But some operators say criteria for running fleets numbering in hundreds too demanding and cater only to two powerful players
Hong Kong taxi groups have dismissed a government plan to introduce a premium cab fleet, saying its requirement for prospective operators to field at least 300 vehicles pandered to cash-rich companies and failed to help most drivers.
The government has tabled an amendment bill laying out how the proposed taxi fleet would operate. It encourages taxi operators to provide quality service by forming a professional fleet management team.
A source told the Post that ride-hailing firm Uber was welcomed by authorities to run the taxi fleet, but the government was standing firm in its opposition to ride-sharing businesses offering private car rides without the mandatory hire-car permit.
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“There will be no room for negotiation about illegal ride-sharing operation, but Uber can still apply to run the taxi fleets,” the insider said.
An Uber spokesman said it welcomed the government’s initiatives to improve the taxi experience in Hong Kong. “We are open to working with relevant stakeholders and the government such that the whole society can enjoy better taxi rides,” he said.
Under the proposed scheme, each fleet size should have 300 to 1,000 taxis if operating in the city centre or 100 to 350 cabs in servicing the New Territories, with the licensee required to own at least 10 per cent of the vehicles. The licensee must maintain an employer-employee relationship with at least 10 per cent of fleet drivers.
Each fleet must include at least 10 per cent of wheelchair-accessible taxis and more luxurious vehicles each valued at more than HK$300,000 (US$38,346), while all fleet taxis should be less than three years old and equipped with facilities such as Wi-fi and e-payment options.
As an incentive, fleet taxis could charge a booking fee on top of the metered fare for booked trips, but they could only charge metered fares for street-hailing trips.
The scheme would run for five years and be extendable for periods of up to five years.
Authorities hope to offer passengers a premium alternative to the existing system, following complaints over driver misbehaviour, such as overcharging, cherry-picking passengers and taking circuitous routes.
But Chau Kwok-keung, chairman of the Hong Kong Taxi and Public Light Bus Association, and founder of Jumbo Taxi that manages a fleet of more than 600 cabs, said the demanding criteria of the scheme would deter small firms from joining.
“I am sceptical about the scheme. The fleet scheme requires each licensee to run at least 300 vehicles for urban taxis and they should be new cars. The capital cost would be very high, over HK$100 million,” he said.
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“All these conditions will make it very difficult for those who want to be a player. I reckon only two wealthy conglomerates will be willing and capable of running a taxi fleet.”
Chau also pointed out that the profit margin would be low as the investor had to dish out a large sum, while also being required to manage a team of drivers during a time when they were scarce.
“The most important thing is that so far the government is unwilling to crack down on Uber rides, which will continue to compete with these fleet taxis,” he said. “Without promising development prospects in the industry, how can investors be willing to put their money into a business that may not be profitable?
“The government seems only willing to attract wealthy conglomerates to take part in the scheme and doesn’t care how to improve the service quality of existing operators.”
Chan Man-keung, an operator who manages more than 100 cabs and heads the Association of Taxi Industry Development, agreed, saying he was not interested in taking part in the scheme.
“The threshold is too high as the licensee must maintain an employer-employee relationship with at least 10 per cent of fleet drivers, and the vehicles should be brand new but they can only charge an additional booking fee,” he said.
“The capital investment will be very high with too little profit. It is not easy to meet all these requirements. There are not too many who have the financial capability to run a taxi fleet under the scheme.”
But Doris Leung, CEO of Diamond Cab, which caters to wheelchair users with five barrier-free taxis, said she supported the scheme.
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“Our shareholders will discuss our intentions, and we open up to the possibility of forming a partnership with other firms to bid for a taxi fleet,” she said. “The scheme is a good thing because it seeks to enhance the industry development with more value-added services. We need new ideas to be able to improve ourselves.”
Leung said the scheme did not bar small taxi firms from joining as they could form a joint venture with others to meet the entry criteria.
“It has been difficult to improve the overall service quality of taxis due to their scattered ownership and the lack of licensing conditions targeting their service quality,” she said.
“The scheme will encourage the restructuring of taxi fleets with similar values under the same management directions. It caters to the survival of the fittest and will eliminate those who are no longer fit to stay in the industry. This is the only way the industry can improve themselves.”
