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Hong Kong taxi drivers should welcome a premium service that will meet consumer demand

South China Morning Post
CommentInsight & Opinion
2017-03-23

Anthony Cheung believes the 600 new franchised cabs will meet people’s demand for higher-quality rides. Hong Kong can well accommodate two types of service, and the taxi trade should not see change as a threat

 

Responses from the public and taxi trade to the Hong Kong government’s latest proposal on franchised taxis seem to be quite diverse. The public generally welcomes the new choice and calls for its early introduction, whereas some members of the taxi trade are worried about the impact of the new service on existing taxis.

The government has been listening to views in the community. We first mooted the idea of a premium taxi service in November 2015, to meet the community’s demand for personalised public transport services of higher quality. We have met members of the taxi trade, unions and other stakeholders through various channels, and we have been monitoring public opinion and media comments.

Adjustments were made to the preliminary proposals put forward last June, to address the concerns of the taxi trade on the one hand, and to better meet passengers’ demand for a more efficient and higher-quality “online car hailing” service on the other hand.

The 600 franchised taxis to be introduced represent only about 3 per cent of the 18,000-odd taxis in Hong Kong. Hence, they should not be seen as a threat to the survival of ordinary taxis.

Their role is to bridge the gap in the existing taxi market and respond to a very clear demand for new choice. With differentials in fare levels as well as operating and service features (at least half of the taxis in the new fleets are required to have wheelchair access), the move will help define two complementary taxi sectors. As an international city, Hong Kong can accommodate two types of taxis to meet diversified demand, just like, for example, Singapore and Tokyo.

In response to the concern of some trade members about an unrestrained number of franchised taxis in future, the government has now proposed to stipulate a statutory cap on the number of franchised taxis at 600. Any future adjustment of the cap will require a legislative amendment.

Having regard to the views of the taxi trade, the government may consider relaxing the proposed mandatory tendering requirement to have a formal employer-employee relationship between the franchisee and the drivers.

Yet, we still consider an employer-employee relationship conducive to providing employment stability for drivers and attracting new blood to the trade. Hence, tenderers’ specific proposals for monitoring the service quality of drivers, as well as their reward and penalty system, will be an essential criterion for assessment.

To address the concern that existing taxi operators may be excluded from participating in the franchised taxi market, the government now proposes to give a higher score to tenderers with experience in operating taxi and other public transport services in Hong Kong, provided they will operate the new service under the franchise model. We further propose that operators be required to pay a franchise fee.

Some worry that the launch of franchised taxis may aggravate traffic congestion.

Looking at it from a different perspective, the target clientele of franchised taxis will include some private car commuters; hence franchised taxis may actually help reduce the number of private cars on the road.

In response to the taxi trade’s concern about the shortage of drivers, we consider that appropriate facilitating measures (including proper driver training and more stable and better-protected employment arrangements) will help attract new blood to the trade.

The government is reviewing the existing requirement that applicants for driving licences of commercial vehicles (including taxis) must have held a valid licence for driving a private car or light goods vehicle for at least three years.

Franchised taxis are a new choice for passengers who need a premium service, while existing taxis, with their lower fares, will continue to provide the bulk of the taxi service for the general public.

As such, the government will certainly not abandon the existing 18,000 or so taxis. We will continue to work closely with the trade to explore how to improve the existing taxi service and formulate proactive measures.

In the course of studying the launch of franchised taxis, the government has listened to the views of the whole community, not just those of the taxi trade. We are not working behind closed doors. The public demands more choices and reforms. We have to think out of the box and act responsibly.

Professor Anthony Cheung Bing-leung is Hong Kong’s secretary for transport and housing

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