Hong Kong authorities have finally begun laying out details on how they plan to regulate ride-hailing platforms such as Uber, Tada and Didi Chuxing, months after lawmakers passed the city’s first legal framework for the sector in October.
Officials have provided more information on enforcement powers, penalties and licensing arrangements, although the key issue of how many ride-hailing vehicles will ultimately be allowed on the road has yet to be resolved.
The South China Morning Post tackles some of the major questions surrounding the proposed regime so far, and how it may affect riders and drivers.
1. What exactly is changing under the new framework?
Under the proposed system, ride-hailing platforms, drivers and vehicles would all need separate licences or permits to operate legally in Hong Kong.
Officials plan to table subsidiary legislation in the Legislative Council before lawmakers go on summer break in late July.
They will then invite platforms to apply for licences in the third quarter of the year, and begin accepting applications from vehicles and drivers in the fourth quarter.
Authorities have not yet decided on how many ride-hailing vehicle permits will initially be issued, only saying they will continue listening to views from the public and industry representatives before finalising the cap.
2. What penalties could platforms and drivers face?
A government paper for lawmakers revealed on Monday, ahead of chamber discussions the next day, set out detailed penalties for illegal operations for the first time.
Platforms operating without a licence could face fines of up to HK$1 million (US$128,000) and 12 months’ imprisonment.
Licensed platforms that allow unpermitted vehicles or drivers onto their systems could also face a fine of HK$10,000 for each non-compliant vehicle or driver and six months’ imprisonment.
For subsequent convictions, the maximum penalty rises to HK$25,000 for each driver or vehicle, and a year in prison.
Drivers operating without the required permit or outside licensed platforms could face fines of up to HK$10,000 and six months’ imprisonment, with repeat offenders facing increased fines of HK$25,000 and 12 months in prison.
They could also be disqualified from holding a driving licence for one to three years, while their vehicles could be impounded for six months for a first offence, and then for 12 months upon subsequent convictions.
3. How will authorities monitor ride-hailing platforms?
The proposed regulatory regime would require platforms to share operational data with the Transport Department.
Platforms would need to keep records covering driver and vehicle information, booking numbers, cancellations, passenger waiting times, fares and complaints.
Authorities also plan to establish direct electronic communication channels with platforms to conduct spot checks and monitor compliance.
The government said platforms could also be required to use technology such as facial recognition to verify drivers’ identities and ensure they were driving their own registered vehicles.
Meanwhile, passengers would receive driver details through the app after confirming a booking.
Platforms would also be required to provide complaint and customer service functions.
4. Why the insistence on an ‘owner-driver’ model?
One of the more significant proposals is a requirement that ride-hailing vehicles can only be used by their registered owners while providing services.
Officials said the arrangement was aimed at preventing permit speculation and avoiding the emergence of a vehicle rental market similar to the taxi licence system.
But Uber argued that the proposal was too restrictive and hoped permits could be shared among family members, noting many existing drivers already used vehicles registered under relatives’ names.
The platform said the arrangement would improve vehicle utilisation rates and help ease supply shortages during peak periods.
5. How will the government decide the number of permits?
The cap on the number of ride-hailing permits was one of the most anticipated details that went unanswered.
The government said that any cap would need to account for public demand, road capacity and the wider transport ecosystem.
Authorities estimate ride-hailing services currently handle about 190,000 passengers daily, representing roughly 114,000 trips, compared with 690,000 passengers for taxis.
Officials also argued that because most ride-hailing drivers worked part-time, three ride-hailing vehicles were needed to provide roughly the same operating capacity as one taxi.
Speaking on a radio programme on Tuesday, lawmaker Ben Chan Han-pan said authorities should take a “prudent” approach when launching the system.
He suggested that the initial number of permits could be lower than the city’s current taxi fleet of about 18,000 vehicles.
But Uber warned that a low quota could result in up to four in 10 ride requests being unfulfilled during peak periods.
The company also said waiting times could double and fares could rise by as much as 70 per cent during busy periods if supply was too restricted.
The Smart Transportation Alliance, headed by former lawmaker Gary Zhang Xinyu and including ride-hailing platform members, earlier suggested 20,500 licences in the initial phase, saying a lower figure risked inconveniencing the daily lives of residents.
6. What changes might passengers notice?
The government said licensed ride-hailing vehicles would be required to display official identification markings, allowing passengers and law enforcement officers to identify compliant vehicles more easily.
Authorities also plan to launch an online system allowing members of the public to check whether a vehicle holds a valid permit.
Ride-hailing platforms applying for licences may also be required to explain how they would incorporate taxi-booking services into their apps and attract taxi drivers onto their systems. -- SOUTH CHINA MORNING POST
