Hong Kong authorities offer taxi trade HK$2 rise in flag-fall rate for all cabs, undercutting industry proposal: sources

Industry is seeking to increase cab starting fees by HK$4.5 to HK$6 depending on taxi type, but sources say authorities waiting for sector’s feedback on counter-offer
‘The government has to consider [taxi industry’s calls], but must strike a balance based on affordability for residents,’ one source says

Hong Kong transport

Cannix YauandLilian Cheng

Published: 3:26pm, 7 May 2024

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Hong Kong authorities have countered a taxi trade proposal to boost fares by offering a lower increase of HK$2 (26 US cents) for all flag-fall rates rather than the up to HK$6 rise sought by the industry, the Post has learned.

Two sources said on Tuesday that authorities had told members of the Executive Council about the new proposal, but it would be subject to industry feedback before the key decision-making body could approve it.

Under the government’s counterproposal, the flag fall for all taxis will be increased by HK$2, a far cry from the industry’s hopes of a HK$4.50 to HK$6 rise.

That would bring the flag-fall charge to HK$29 for red cabs in urban areas, rather than HK$32 as proposed by industry chiefs.

“The industry has been requesting a bigger increment since 2019. The government has to consider their calls, but must strike a balance based on affordability for residents,” the first source said. “Any flag-fall rate below HK$30 should be acceptable.”

Under the counterproposal, the flag-fall fee for green taxis in the New Territories would be HK$25.50 and HK$24 for blue ones on Lantau Island, compared with the sector’s suggested HK$28 rate.

The insider said the government had also suggested an incremental charge for the first-tier distance after the flag fall of HK$2.10 for red taxis, HK$1.90 for green cabs and HK$1.90 for blue ones, a rise of between 10 HK cents and 20 cents.

For second-tier distance, authorities only offered an increase of 10 cents instead of the hoped-for 20 cents, pushing up the incremental charge to HK$1.40 for red and green taxis, and HK$1.60 for blue ones, the first source said.

The government last approved a fare rise in 2022, with urban and Lantau taxis increasing their minimum charge by HK$3, while New Territories taxis by HK$3.50.

Authorities at the time also increased the incremental charges for the first-tier distance after the flag fall by 20 cents and 10 cents for the second tier.

Chau Kwok-keung, chairman of the Hong Kong Taxi and Public Light Bus Association, has called for authorities to crack down on ride-hailing firm Uber. Photo: Edmond So

A paper submitted to the Legislative Council last March said the taxi industry was seeking fare increases that would cover all three types of taxis.

Under the industry-backed proposal, the average rates for the fare increases would be 16.95 per cent for urban taxis, 15.37 per cent for those in the New Territories and 11.68 per cent for Lantau cabs.

The latest statistics showed that after inflation was factored in, the average net income of cabbies in urban areas stood at HK$21,767 per month in 2023, a 6.2 per cent increase from the previous year.

In comparison, the average net income for cabbies was about HK$19,360 a month in 2019, before the Covid-19 pandemic.

Green cabs logged a 0.8 per cent increase and blue taxis recorded a 2.7 per cent fall in average net income last year.

Chau Kwok-keung, chairman of the Hong Kong Taxi and Public Light Bus Association, said the idea of a reduced fare rise was disappointing, calling for authorities to crack down on ride-hailing firm Uber.

“I am dismayed by this increase. This is unfair to us as Uber drivers can earn at least more than HK$40 per trip, compared with the minimum fare for cabbies at over HK$20,” he said.

“We will see if the government will tighten its crackdown on Uber, otherwise we might make another fare rise application soon.”

The city has 18,163 taxis – 15,250 red cabs, 2,838 green ones in the New Territories and 75 blue cabs on Lantau Island.

The industry previously said ride-hailing services such as Uber were its main competitor and had cost the trade an estimated HK$20 million in revenue a day.