U-turn over Uber: Why taxi drivers and car hire apps are locking horns

Many taxi drivers were pleased when police raided Uber's office amid concerns over the car hire app's legality, but thousands of other Hongkongers were outraged. Shirley Foo investigates if HK is ready - or even able - to accept a diversified car hire market

If you’ve ever tried to take a taxi in Hong Kong at night or in a popular location, the chances are you’ve also come across a driver who has refused to take you to your destination or tried to charge you more than what is displayed on the meter. It’s frustrating and, though technically illegal, all too common.

In August police arrested two taxi drivers for allegedly overcharging passengers, releasing a collective outpouring of frustration from the public that more isn’t done to combat the problem. These kind of arrests are rare, and were likely spurred by a surge in complaints received by the Transport Complaints Unit – there were over 10,000 official complaints against taxi drivers in 2014, up 8.1 percent since 2013. Despite that, approximately only one percent of driver malpractice cases referred to the police are actually brought to court.

Dicky Chan is a taxi driver and member of the Motor Transport Workers General Union. He acknowledges that unsavoury behaviour is common in his industry. “I think the reason is that the punishment is not severe enough,” he admits. “If drivers break the law, they should go to jail or have their license revoked.” Chan estimates that offenders who are caught overcharging or refusing fares often end up getting off with a $1,000 fine.

It’s unsurprising, therefore, that passengers have been turning to alternative apps and hire services like Uber, which is the biggest of its kind in the city. Its growth is faster in Hong Kong than anywhere outside of the US, according to Sam Gellman, Uber HK’s general manager.

Ken Cheung (name changed upon request) is an avid Uber user. We talk to him while he’s using the app on the street in Wan Chai. “If you call a cab station to book a cab, it’s common for drivers to add $5 or $10 during peak hours,” he complains. “Uber is the same though, with its surge-pricing model [where fares fluctuate depending on the number of drivers available], but it’s fairer because you know what to expect. Uber has better cars and service. There is no need for cash, and the driver can’t complain that you’re travelling a short distance.”

Denis Leung received his taxi driver’s license last year but acknowledges there is a significant market in Hong Kong for hire services like Uber. “People are happy and willing to pay for better service, vehicles and attitudes. I don’t see why customers should be deprived of choice,” he says. “With apps such as Uber, it really makes things easier for the customer.”

Leung also believes that an app like Uber can make life easier for drivers. “From the driver’s point of view, you really wouldn’t know where customers would be or where they are travelling to without the app. Technology has provided the industry with this ability. It’s beneficial to all parties,” he explains.

Any licensed driver with a four-door vehicle that is under 10 years old can register to become an Uber driver. It is also well-known within the industry that Uber drivers gain more income than taxi drivers, with earnings reportedly reaching as much $10,000 per week. This is partly due to bonuses – newly registered drivers earn an extra $1,000 after taking five orders, and others receive $1,500 for taking a minimum of 18 orders during peak hours. Many taxi drivers take home less than half this amount. “Additionally, [Uber drivers] get a better working environment as they are in control and can organise their own time,” says Leung. 

However, Uber is under fire. The company’s offices were raided on August 11. Three staff were taken into custody and seven Uber drivers were arrested in a sting operation. All have since been released.

The thorny issue at the heart of the raid is whether car hire apps like Uber are legal in Hong Kong. The Hong Kong Consumer Council is currently conducting a study into the legality of Uber’s services. A spokesperson from the Transport Department tells us, ‘it is an offence for any person using a private car without a hire car permit to provide hire car service.’

Despite this, the public is embracing the emergence of Uber. Thousands have used the hashtag #SupportUberHK on social media. When Uber launched a petition of support, over 10,000 signed within an hour. Over 55,000 had signed at time of going to press.

Unsurprisingly, private car apps have triggered huge unrest in the taxi industry. In July, three taxi drivers’ unions staged a protest against app hire services in Wan Chai, demanding tighter government enforcement against unlicensed drivers. Over 100 taxi drivers also participated in a mass ‘slow drive’ on Hong Kong Island, claiming that such competition is costing drivers hundreds of dollars per day in business.

A Hong Kong Taxi Owners’ Association spokesperson tells us, “Uber vehicles have no license for business transportation or any third party insurance, thus putting customers’ lives at risk. It is important for customers to understand that this is against the law and that they are endangering themselves by using those services.”

Taxi driver Chan is also unhappy with private hire apps. “In the last two years, it has cost over $7 million to purchase a cab license. Uber drivers are taking business away from taxi drivers,” he says. The extravagant cost of buying one of the city’s 18,138 licenses is partly because the government stopped issuing new ones more than 20 years ago, making them a valuable commodity for trade.

Leung understands the pressure taxi drivers are under, especially following Uber’s introduction into the market. “We don’t make a lot of money; around $500 to $1,000 a day after deducting rental fees and fuel, so there is a tendency to maximise our profits. Sometimes, I don’t have lunch because I’m trying to get more time on the road. I constantly hold my bladder because I don’t know when my next toilet break will be.”

While Leung grasps the public’s frustration at taxi drivers’ perceived poor attitudes, he has his own explanations. “I am an Island taxi driver,” he states. “I do not like to take customers across the harbour because I know that when I return, I’ll be subject to heavy congestion in the tunnel. Also, I will probably have to come back without any customers because I don’t know Kowloon or the New Territories very well. I wouldn’t know where to pick customers up at the right time.”

Harold Li, Uber spokesperson for North Asia, counters that it should be a free market. “Uber wants to ensure that [customers] have access to safe, reliable, quality rides. Tens of thousands of Hongkongers have embraced the transportation options that Uber seamlessly connects them with, and thousands of drivers are enjoying the flexible economic opportunities that partnering with Uber provides.”

Last week, in a surprise twist, Ng Kwan-shing, convener of a taxi alliance organisation, told RTHK that several drivers’ groups plan to launch an app to rival Uber and raise industry standards. 

Evidently, Uber’s troubles have not yet discouraged the public from using its services. “It makes no sense for the taxi market to be so exclusive by having so few licenses and being so regulated,” says Uber user Cheung. “Uber provides greater choice, more flexibility and cheaper options for people. This is the way of the future. There’s so much capacity in our economies. Why waste it?”

Check out Uber’s petition at action.uber.org/hongkong.