By Alex Liu

Hong Kong, 9 September 2025: In a move many will consider long overdue, the Hong Kong government has finally put forward a proposed regulatory framework for legalising ride-hailing services. The Road Traffic (Amendment) (Ride-hailing Service) Bill 2025 has been tabled before the Legislative Council and, once implemented, will bring to an end more than a decade of the industry operating in a legal grey area.

The current situation is frustrating for citizens. Uber and other platforms operate illegally in this city as the vast majority of their drivers do not possess a hire-car permit. It is well established that such drivers are breaking the law, but passengers are not. Thus, these services are hugely popular and widely used.

Naturally, the taxi industry has staunchly opposed these platforms, which it accuses of unfair competition and stealing business. Yet taxis have a poor reputation for rude drivers, overcharging, cherry-picking passengers, taking circuitous routes and lack of electronic payment.

Government efforts to improve taxi services – such as combating driver malpractice, encouraging higher standards and introducing “premium” taxi fleets – have met with a degree of success. However, regulation of ride-hailing services has remained off the table until now. The bill’s chief proposals are:

Licensing regime: All platforms, drivers and vehicles are required to obtain a licence in order to operate. Licences will be issued by the Transport Department.

Platform operators: They must meet strict entry requirements, including being registered in Hong Kong, proving financial capacity, showing operational experience, and meeting director qualification standards. Anyone found guilty of running an unlicensed ride-hailing platform may face fines of up to HK$1 million and a jail term of up to 12 months.

Driver requirements: They must be the registered driver of the vehicle. As well, they must be at least 21 years old, hold a Hong Kong permanent identity card, have no serious traffic convictions in the past five years, and pass a government test. (It is proposed to merge the written tests for both ride-hailing and taxi drivers.) Ride-hailing drivers found to be illegally carrying passengers will face disqualification from driving for up to three years, while vehicles may be suspended or impounded for six months.

Vehicle requirements: Private cars must be driven by their registered owner when providing ride-hailing services. They will need to obtain a “ride-hailing vehicle permit”, with conditions including maintenance and third-party risk insurance. Vehicles must be less than 12 years old and display clear identification markings when in operation.

Checks and safety: Operators must maintain proper records and perform due diligence to ensure all vehicles and drivers have valid permits. As an example, a platform must ensure cars are being driven by the registered drivers of the vehicle. Failure to comply may result in a HK$10,000 fine for the driver.

Permit cap: The authorities have indicated they will restrict the total number of ride-hailing vehicle permits, but have not yet said how many. Transport minister Mable Chan says the government will take into account the public transport ecosystem, road capacity and needs of customers when deciding the number of permits.

When will all this happen? With lawmakers broadly in agreement on the need for ride-hailing regulation, officials hope the legislative process will be swift. Subsidiary legislation will be presented by the middle of next year to address details such as permit quotas, driver tests and licence fees, after which the government will invite applications for licences. It is hoped that the first licensed ride-hailing platforms can begin operating by the fourth quarter of next year.

In summary, the bill is a welcome development. The new regime will offer more convenience, choice and value for consumers; greater clarity for law enforcement and relevant government departments; and a better image for Hong Kong as a modern, progressive city.

Alex Liu is Managing Partner of BC&C. Among his many official appointments, he is a Panel Chairman of the Transport Tribunal, which hears appeals against decisions made by the Commissioner for Transport on matters such as vehicle registration and licensing, driving licences and hire-car permits. He can be contacted at alex@boasecohencollins.com.