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The slow lane to modernisation

Hong Kong, 17 April 2024: “Round round, get around, I get around,” sing the Beach Boys, in typically carefree fashion. We can assume they’ve never taken one of Hong Kong’s ageing cabs, an experience that puts the brakes on the pleasures of gadding about town. If you can grab such a vehicle, it invariably comes with an elderly driver who takes cash only and has never used a satnav. Cynics might observe both tune and taxi service are rooted in the 1960s.

Our city’s taxis have long been a contentious topic. Complaints have shot up by 93% in the past two years. Most grievances relate to drivers being rude, overcharging, cherry-picking passengers or taking circuitous routes. There are also increasing concerns over safety after a spate of high-profile accidents involving elderly drivers. More than half of this city’s licensed cabbies are in their 60s or older.

Hence, the taxi industry’s latest proposal for fare increases of up to 17% has struck a dud note with lawmakers and the public. Defiant taxi lobby leader Chau Kwok-keung cites higher insurance costs, losing customers to ride-hailing apps and expenses stemming from a government-backed initiative to introduce electric taxis. A planned strike by cabbies last November was only called off at the last minute after authorities promised to crack down on Uber and similar services. Pondering such action, Chau insists: “The government will not want to see this, we also do not want to see this.”

Lawmakers are unimpressed. Legislative Council transport panel member Kitson Yang notes the last fare increase came with a pledge to improve service quality. “Two years later, why am I still seeing shady cabbies, the refusal of carriage and such varying opinions of the service provided by taxi drivers?” he asks. Colleague Scott Leung describes the taxi industry’s image as “negative” and predicts a domino effect: “It may signal other businesses that it is about time for price hikes.”

Even so, they could have little choice but to say yes. The Transport and Logistics Bureau highlights soaring operating costs for cabbies over the past four years, compounded by reduced business post-pandemic. Insurance premiums have jumped nearly 60% while repair and maintenance outlays are up 30%. “The data reflects that in terms of the current fare levels, it is fairly difficult to maintain the financial viability of taxi operations,” admits transport commissioner Angela Lee.

How have we reached a point where supposedly ultra-modern, super-connected, high-tech Hong Kong has such a creaking taxi service? One that bears no comparison to modern ride-hailing apps? There are several, but Uber is the big daddy. Since arriving here in 2014, Uber has proved immensely popular with citizens and has expanded quickly, but ride hailing remains illegal without a car hire permit and the firm has faced strong resistance from taxi operators. Uber has always insisted it wishes to work with the government and taxi industry to improve the city’s mobility. Within the corridors of power, however, there is a lack of appetite for wholesale reform.

Uber and its counterparts operate in a grey area. It is generally agreed a citizen is not breaking the law in using a ride-hailing service, but the driver is. So, residents enjoy their journeys while those at the wheel willingly accept the risks. As my colleague Alex Liu – a panel chairman of the Transport Tribunal – sagely points out in a recent China Daily article: “Citizens have shown they are prepared to pay a premium for better cars and drivers, full digital immersion from booking to credit card payment to driver reviews, and greater convenience.”

Thankfully, cabbies are at least being dragged out of their cash-only comfort zone. Hong Kong fintech company Wonder has won approval from the Transport Department for its effort to bring digital payments to our city’s 18,000-plus taxis. The firm’s system will allow citizens and visitors to use 18 different payment options to settle fares. It is even offering drivers the equipment for free as an early-bird incentive for the next six months.

Meanwhile, our government is cracking down on drivers who provide illegal rides and rogue cabbies. Legislation will come into effect later this year that doubles fines for Uber drivers and their ilk. The authorities have also pledged to further review ways of combating illegal ride-hailing. At the same time, a new law will implement a penalty points system targeting taxi driver malpractices such as overcharging and taking a circuitous route. Critics doubt any of these measures will be especially effective. Will we ever see traditional taxis and Uber-style services co-exist peacefully? Certainly, it would require a marriage of convenience.

Which brings me neatly to Hong Kong’s best-known divorce lawyer, Sharon Ser. She is my latest guest on Law & More, reflecting on her early experiences as a legal professional in London, her subsequent move to Hong Kong and how she established her formidable reputation as the go-to practitioner in Family Law. It’s an illuminating chat full of empathy and insight. Please listen.

In closing, it turns out the century-old University of Hong Kong is now a tourist hotspot after featuring on a popular mainland social media platform. The trend has caused campus chiefs to consider imposing crowd control measures since visitors are descending in droves, distracting students and even intruding on lectures. The Beach Boys, clearly, are not the only ones who get around.

Until next time, everybody!

Colin Cohen
Senior Partner
Boase Cohen & Collins

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