Hong Kong may set ride-hailing floor price to prevent race to bottom, Post learns

Hong Kong authorities could use their right to control ride-hailing prices to prevent excessive and reductive competition, or involution, the Post has learned, but a lawmaker warned on Sunday that this could cause legal problems and suggested regulation through controlling the number of licences issued instead.

A source said that the government could, under an existing section of the Road Traffic Ordinance, set a minimum price for ride-hailing services to avoid involution among ride-hailing platforms, which currently include Uber, Tada, Amap and Didi Chuxing.

The ordinance states that the chief executive “may make regulations to provide for the fares which may be charged on any public service vehicles other than buses operated under a franchise … and the fees which may be charged for the hire of a public service vehicle”.

Hong Kong’s transport authorities on Thursday unveiled their proposed regulatory framework for legalising ride-hailing services, which included a licensing system and set requirements for vehicle age and insurance, in a move to end more than a decade of the industry operating in a legal grey area.

Apart from licences for the ride-hailing platforms, individual drivers and vehicles will also need to obtain their own separate permits.

Licensed platforms will be allowed to set their own fares but must tell passengers about the fee structure before a trip starts.