Tai Kok Tsui resident Josephine Ho said the fare hike would not deter her from taking taxis for short and medium distances, especially during the “unbearable” summer heat.

“It is just more cost-effective and more comfortable taking taxis,” she said. “But I certainly hope I can get more polite service since I pay more now.”

Cabbie Chung Tak-wing said he expected his business would not be “heavily affected” by the fare hikes.

“At the end of the day, it all comes down to necessity. People won’t care about the HK$2 increase if they need taxi rides,” he said.

Chung added the daily HK$350 in rent he paid to the owner of the taxi would increase by about HK$20 to HK$30 due to the fare rise.

The industry has long attracted complaints over the behaviour of cabbies and their lack of electronic payment options, one of the reasons the government is launching the premium fleets that promise better service.

Lam said authorities planned to issue up to five fleet licences this month, half a year after the relevant bill was passed, and he expected some to start operating by the end of this year.

“I believe there is a common wish among the fleets to operate as soon as possible provided they can maintain [good quality of] the service,” he told a radio programme.

The fleets would prioritise online reservations while also offering street-hailing services, but authorities had not set a maximum limit for the booking fee, he added.

“We did not set the limit for the booking fee as we believe the market would play a role in adjusting it,” Lam said, adding he hoped the level would be welcomed by both providers and residents.

The owners of taxis belonging to the fleets would be free to change the appearance of the vehicles so commuters could more easily recognise them, for instance by painting them a colour other than the red for urban taxis or green for cabs in the New Territories, he said.

Chow Kwok-keung, chairman of the Hong Kong Taxi and Public Light Bus Association who submitted an application for a fleet of about 400 cabs, said he believed the booking fee would be set according to the needs of each operator, but he leaned towards a minimum charge.

“Apart from a fare for point-to-point service, we lean towards a minimum HK$35 reservation fee per ride to cover some of our operating expenses that come with meeting the new fleet,” said Chow, who also founded Jumbo Taxi that manages more than 600 cabs.

The premium taxi fleets will be subject to stricter rules than regular cabs, including being required to provide online booking channels and e-payment options, as well as installing cameras in the vehicles.

Vehicles joining the fleets must also be no older than three years.

The Transport and Logistics Bureau earlier this month announced the long-anticipated proposals to impose stiffer regulations on ride-hailing services. But Lam on Sunday brushed aside critics who argued that the timeline for the regulatory effort was excessive and slow-going.

“We also need to consider Hong Kong’s uniqueness. For example, you will not see as many taxis on the streets in foreign countries compared with this city,” he said.

Hong Kong has 46,000 taxi drivers, with 18,163 cabs on the road, while Uber Hong Kong’s general manager has said its platform had more than 10,000 active drivers each month.

The company, which has operated in the city since 2014, has faced accusations that a number of its drivers are operating without private hire-car permits, fuelling a long-standing dispute with cabbies.

Under the current system, vehicles offering paid transport services must have the permit, the number of which is capped at 1,500. Only 1,115 of the documents had been issued by the government as of 2021.

In a submission to the legislature on Thursday, Uber urged the government to establish a new licensing framework or “comprehensively” relax hire-car permit requirements and abolish permit quotas.

The online hailing service provider also asked to maintain flexibility in pricing, vehicle standards and platform operation to build an environment in which both taxi and ridesharing service providers could co-exist.

It described its service as making a substantial contribution to the economy, citing a survey conducted in March that showed 84 per cent of the interviewed 1,576 taxi drivers said their earnings through the platform was a “very crucial” or “crucial” part of their total income.

The Competition Commission has also called on the government to recognise the importance of online ride-hailing services and enable fair competition with taxis, while encouraging innovation and providing strong incentives for the sector to introduce technologies favourable to both consumers and hired drivers.