Hong Kong unveils plan to regulate Uber 10 years after launch

HONG KONG - Hong Kong outlined a long-anticipated plan to regulate ride-hailing services, potentially limiting the scope of Uber Technologies in a city known for its poor taxi services.

The authorities intend to license platforms such as Uber and adopt tougher penalties for rule-breaking, the Transport and Logistics Bureau said in a paper published on July 8. Taxi services would be improved through the introduction of so-called premium fleets, it said.

At the heart of the issue is the number of hire-car permits available for ride-hailing services. Currently, there are only 1,500. Uber, which launched in Hong Kong a decade ago and has been unregulated since, has more than 10,000 drivers in the city.

Officials said they have no plans to increase the quota, the South China Morning Post reported.

The proposal lacks clarity, said Assistant Professor Oliver Chan at the Chinese University of Hong Kong. If they do not increase the quotas for hire-car permits, many Uber drivers would still be operating illegally, he said.

Uber said it welcomed the government’s plan to regulate ride-hailing platforms, adding it is “critical” for the government to also come up with a workable licensing regime. Any move to cap the number of ride-sharing licences in the city would deal a blow to the many drivers who rely on the platform for flexible earning opportunities, a company spokesman said.

Uber has long drawn the ire of Hong Kong’s taxi licence owners, who have seen the value of their licences go down. A taxi licence is now worth HK$2.8 million (S$484,000), down from about HK$7.3 million back in 2015.

The authorities have barely sold any new licences for 30 years, despite the population rising by about 1.5 million people, or 25 per cent. There are around 18,000 taxis in circulation.

Earlier this year, some disgruntled taxi drivers posed as Uber passengers in order to report them to the police. That prompted the city’s leader John Lee to warn people against conducting undercover operations.

Complaints about rude service, overcharging and dangerous driving have long dogged Hong Kong’s taxi trade, further putting pressure on the government to regulate ride-hailing while also introducing reforms to improve taxis.

Complaints against taxis lodged with the government in 2023 rose 75 per cent compared with 2022, while the number of traffic accidents involving taxis increased by 26 per cent.

The Transport Department will conduct a study on commuter needs to help shape the new planned regulatory regime, according to the July 8 paper. The study should be completed within 12 months, it said. Lawmakers will discuss the regulatory framework on July 12 in a panel meeting.

Uber has in years past clashed with regulators around the world, as its phenomenal growth applies pressure on traditional taxi and transport businesses. While Hong Kong is a fairly small market for the San Francisco ride-hailing leader, the outcome of the dispute may help shape a framework for regulating the company elsewhere.

The company has already shielded itself against potentially tough regulation of ride-hailing services through its 2021 acquisition of local taxi-hire app HKTaxi. Users of the Uber app also have the option to book metered taxis, which the company said in October includes more than 10,000 taxi drivers.

Yet, according to lawmaker Gary Zhang, it is not possible for the city to put the Uber genie back in the bottle. “Taxis in Hong Kong are truly not able to meet the capacity and needs of the public,” he said. “If overnight, Uber was wiped out from Hong Kong, that would have such a huge impact on the city.” BLOOMBERG