Editorial:Rescue Taxi Trade via Reform, Not Fare Hikes

【明報專訊】The Executive Council has approved a fare increase for taxis. However, the increase was lower than what the industry had demanded, and taxi unions have expressed their dissatisfaction. Yet, in the eyes of the general public, the truly exorbitant demand is the industry's original request for a fare hike of about 20%.

Hong Kong's taxi industry has serious structural problems. The deteriorating service quality is the real reason for the industry's decline. The losing out of the taxi trade to illegal ride-hailing services is actually a "symptom" rather than the "source" of its problems. The taxi industry cannot be rescued by increasing the fares — it can only save itself by service improvement. The legislation introduced by the government last year to establish a taxi fleet regime is the last opportunity for the industry's reform. If there is still no significant improvement in its service quality, the authorities should give private ride-hailing the "green light" and let the market principle of the survival of the fittest run its course.

The last fare hike for Hong Kong taxis was in July 2022, with an average increase of 12.8%. Less than two years later, the industry submitted yet another application for a fare hike, proposing an increase of $5, $4.5 and $6 respectively for the flag-fall rate for urban taxis (red cabs), New Territories taxis (green cabs) and Lantau taxis (blue cabs). The rates of the proposed increases were 18.5%, 19.1% and 27.3%. Such an astonishing demand for a rise was indeed unacceptable. This time, the Executive Council approved a $2 increase in flag-fall charges for all cabs, meaning an increase rate of about 9% to 11%. In many citizens' opinion, the Executive Council was already too "lenient".

The service quality of Hong Kong taxis has been frequently criticised. Many citizens and tourists have had the unpleasant experience of drivers refusing to take passengers, taking detours and overcharging. The trade often claims that increasing driver income can help improve services. But the reality is that the service remains unchanged even after fare hikes. In the first quarter following the taxi fare increase in July 2022, the number of complaints about cab services rose rather than dropped. Last year, the authorities received more than 11,000 complaints about cabs, not only representing a rapid year-on-year increase of 50%, but also surpassing the pre-pandemic level of 10,000 complaints per year.

A commonly stated reason for taxi fare increases has been "improving driver income". But in reality, taxi companies and owners are those who benefit most from price increases. It has been pointed out by professional taxi drivers that following each fare hike, taxi owners and companies would immediately raise the taxi rents, leaving limited benefits for drivers. The business may even be better off without fare increases.

Many citizens prefer unauthorised ride-hailing services over cabs because there is no guarantee of getting consistent service quality from taxis. There are serious structural problems in Hong Kong's taxi industry. As taxi licences are permanent, ever since the government stopped issuing new licences in 1994, the approximately 10,000 taxi licences on the market have become investment tools. Many licence holders only see the licence as an asset for speculation or getting rental income, and some licence holders are unwilling to make investments to replace worn-out taxis. The ageing of cab drivers has resulted in frequent accidents, while young newbies are reluctant to enter the trade.

Last year, the government amended regulations to raise the penalties for "cherry-picking" passengers and overcharging by taxi drivers as well as those for "illegal ride-hailing services". A taxi fleet regime was also introduced to promote the reform of the taxi industry. The government has recently started to invite interested parties to apply for the fleet licence with the hope of improving taxi services. Reforming the industry through the implementation of the fleet regime has become the industry's final hope for self-help.

明報社評 2024.05.15:加價難救的士業 改革機會須把握








/ Glossary生字 /

exorbitant:(of a price) much too high

detour:a longer route that you take in order to avoid a problem or to visit a place

cherry-picking:the act of choosing the best people or things from a group and leaving those that are not so good

上 / 下一篇新聞