Hong Kong’s answer to your taxi problems? Make them more expensive

Flickr/Tauno Tõhk / 陶诺
Flickr/Tauno Tõhk / 陶诺

Amid record levels of consumer discontent with Hong Kong’s taxis and an industry-led, government-supported campaign against the ride-hailing service Uber, Hong Kong authorities have unveiled a new plan to improve point-to-point transportation in the city: make it more expensive.

The government announced yesterday that it would be formally moving forward with a plan to introduce 600 “franchised taxis,” run by private operators, and charging higher fares, to meet “new demand for personalized and point-to-point public transport services of higher quality and with online hailing features.” 

The announcement goes on to say that the government itself will set and enforce service standards, penalizing franchisees who fail to comply. It did not, however, explain how the government would enforce something so nebulous as a “service level” when it’s currently unable to prevent cabbies from breaking the law outright on a near-daily basis.

The South China Morning Post reports that the franchise taxi service is meant to increase competition in the sector — something the industry has fought against tooth and nail in the case of Uber — in the hopes that it will also bring about improved service among normal taxis.

However, the city’s Competition Commission has already slammed the proposal in startlingly frank terms, questioning the very basis of the government’s rationale that consumers are clamoring for higher-priced cabs.

“While there are likely to be some consumers less sensitive about the fare they pay, it makes no economic or common sense to assume they will demand higher fares,” it said.

The government’s reasoning appears to be based on a survey that found that 9 percent of respondents would be willing to pay a higher fare for better service — which, if anything, sounds more like an expression of desperation at the current state of affairs than of an actual desire for pricier cabs.

The commission went on to accuse the government of artificially setting prices for the new taxi services, which “is clearly not in the overall interest of consumers.”

Indeed, the overall interest of consumers seems to have barely crossed the government’s mind. Complaints about taxis reached an all-time high last year, according to statistics released last month, more than doubling over the past 15 years to 11,000 in 2018, the SCMP reports. 

The taxi industry, meanwhile, sought to explain away the surge in dissatisfaction as the result of mere miscommunication between drivers and passengers. (And we guess it was just a miscommunication last week when a cabbie asked us for HK$200 for what would have likely been a HK$50 trip.)

All of this, meanwhile, is playing out against the backdrop of the taxi industry’s rabid assault on its only major competition in decades, Uber, which is technically illegal under Hong Kong’s car-hire licensing laws, but which nonetheless enjoys broad public support. 

A survey commissioned by Uber and conducted by Hong Kong University found that 74 percent of respondents supported legalizing the service, while 64 percent agreed with the statement that “the government overprotects existing industries and vested interests.” 


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