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Council question: Personalised and point-to-point transport service
2018-01-31

Following is a question by the Hon Charles Mok and a reply by the Secretary for Transport and Housing, Mr Frank Chan Fan, in the Legislative Council today (January 31):

Question:

According to the latest quarterly figures of complaints on public transport services, about half of the complaints were those made against taxi service, reflecting that the quality of taxi service is in need of improvement. The Consumer Council published a report in November last year, recommending to the Government the introduction of a parallel regime consisting of both taxis and e-hailing services, so as to enhance the quality of point-to-point transport services through increased market competition. In this connection, will the Government inform this Council:

(1) whether the Government will, by drawing reference from the recommendation of the Consumer Council and using the existing system of issuing Hire Car Permits to private cars as a blueprint, introduce in phases and on a pilot basis, a regulatory regime for vehicles, drivers and platforms for e-hailing services, with a view to increasing the market competition for point-to-point transport services, enhancing their service quality and facilitating the transition of in-service drivers to a new economic model; if so, of the implementation timetable and details; if not, the reasons for that;

(2) given that promoting car-pooling and car-sharing was one of the recommendations in the Report of Consultancy Study on Smart City Blueprint for Hong Kong published in June last year, but the Government decided not to incorporate this recommendation into the Hong Kong Smart City Blueprint, which was based on the Report and published at the end of last year, of the process through which the decision was made as well as the relevant considerations and justifications; and

(3) as the Chief Executive stated in the Policy Address she delivered in October last year that in response to the emergence of new economic models (such as the sharing economy) arising from advancement in technology, the Government would review the existing legislation and regulations and remove the red tape, in order to foster the development of a new economy, whether the Steering Committee on Innovation and Technology and the Committee on Taxi Service Quality will, from the perspective of fostering the development of a new economy, jointly examine the introduction of a regulatory regime for e-hailing services as well as consult the public and the stakeholders on the relevant proposals; if so, of the details of the work plan and timetable; if not, the reasons for that?

Reply:

President,

Since Hong Kong is a densely populated city with limited road space, the Government has all along adopted the public transport-oriented policy with railway as its backbone. Various public transport modes serve their functions according to their respective roles and positioning. At present, over 12 million passenger trips are made through public transport services every day. This accounts for nearly 90 per cent of the daily total passenger trips, which is the highest in the world. Personalised and point-to-point transport services in Hong Kong play an entirely different role as compared with those of cities with a lower rate of public transport usage. My consolidated reply to Hon Charles Mok’s question is as follows:

The Government notes that the Consumer Council (the Council), in its report on competition in the personalised and point-to-point transport service market, recommends the Government to consider the proposal of introducing regulated online hailing services, if the franchised taxis, upon introduction, fail to deliver its promise. On the premise that any carriage of passengers for reward must be lawful in Hong Kong, we agree that the new demand in the community for personalised and point-to-point public transport services of higher quality and fare as well as with online hailing features should be well addressed. To this end, the Government has conducted a comprehensive review on the personalised and point-to-point transport services (including taxis and hire car services) under the Public Transport Strategy Study over the past two years and recommended the introduction of franchised taxis to meet the new demand.

The proposed franchised taxis will be a type of public transport services operated through a franchise model. Areas such as the number, service, fares as well as drivers’ quality of franchised taxis will be regulated by the Government. If an operator fails to meet certain service level or standards, the Government may impose penalties through franchise terms or even revoke the franchise. The cap on the number of franchised taxis will be stipulated in the law. Franchised taxis will be operated under fleet management. This will help address the current difficulty in managing centrally the service quality of ordinary taxis due to scattered ownership.

Franchised taxis and the online hailing service proposed by the Council have many features in common. For instance, franchised taxis will provide for online hailing; the franchise will be time-limited with a limit on the vehicle age; all franchised taxis will be equipped with global positioning system devices to record operating data of each franchised taxis for the Government’s inspection; the operators will have to provide drivers; training as well as a platform for lodging complaints and providing comments, etc. As compared with the Council’s proposal, franchised taxis provide higher transparency on fares. The Government is preparing the legislative work with a target to introduce the Bill into the Legislative Council in the latter half of 2018.

Meanwhile, taxis continue to constitute the majority of personalised and point-to-point transport services in Hong Kong. The Government will continue to strive to enhance their service quality and operating environment. To further strengthen the interaction and cooperation with the taxi trade and relevant stakeholders, the Transport Department revamped and established a new Committee on Taxi Service Quality (the Committee) this month. The Committee is chaired by the Commissioner for Transport and composed of non-official members from various sectors. This multi-party platform will discuss various strategies and measures to drive changes under the current taxi licensing regime. With regard to leveraging technology for optimising taxi service, the Government is aware that there are a host of mobile phone applications, equipped with online hailing functions, in the market for passengers to hail or book a taxi. The Committee will consider ways to encourage and motivate the taxi trade to improve and enhance services in this regard to meet passengers’ needs.

“Smart Mobility” is one of the important components for Hong Kong’s development into a smart city.  Our goal is to make use of technology to develop an intelligent transport system, assist in traffic management and alleviate traffic congestion and related environmental problems, so as to bring overall benefits to the community. The Government will progressively implement the measures under the “Smart Mobility” area in the Smart City Blueprint for Hong Kong ( the Blueprint), such as integrating various existing e-transport applications of the Transport Department into an all-in-one mobile application, installing a new generation of on-street parking meters, studying “in-vehicle units” to enable motorists to receive real-time traffic information and pay tunnel fees without stopping the vehicles, and facilitating trials of autonomous vehicles in appropriate areas, etc. The “Report of Consultancy Study on Smart City Blueprint for Hong Kong”, which was submitted in June 2017 by the consultant commissioned by the Government, put forward a number of recommendations for formulating the overall development framework of the Blueprint. The recommendations include suggesting the Government to promote “car pooling”, which does not involve the carriage of passengers for reward but allows drivers/vehicle owners to recover part of the journey cost (such as fuel cost and tunnel toll) from the passengers, as well as “car sharing”, which does not provide chauffeur services but charges a rental based on usage of the vehicles rented and comes with proper insurance coverage. These two types of car pooling/sharing arrangements mentioned in the consultant’s report are both permitted under the existing laws of Hong Kong, and are already lawfully used by some members of the public. As such, the Government did not incorporate these two recommendations into the Blueprint which was published subsequently. The Government will continue to take forward various initiatives under “Smart Mobility” featured in the Blueprint.

Office Of Hon. Charles Mok, Legislative Councillor (IT)