In an exclusive report, it appears that authorities in Hong Kong are contemplating implementing a minimum fare for ride-hailing services in an attempt to prevent a downward pricing spiral.
Hong Kong's transport authorities have proposed a regulatory framework aimed at legalising the ride-hailing industry, which has been operating in a legal grey area for over a decade. The proposed framework includes a licensing system for ride-hailing platforms and sets requirements for vehicle age and insurance.
Under the new ordinance, licensed ride-hailing platforms will be allowed to set their own fares, while the authorities retain the right to control prices to prevent excessive and reductive competition. However, the existing Road Traffic Ordinance allows the government to set a minimum price for ride-hailing services, a move that has raised concerns from a lawmaker about potential legal problems.
Individual drivers and vehicles will need separate permits in addition to platform licenses. Passengers must be informed about the fee structure before a trip starts. The ordinance also allows for the regulation of fees for the hire of a public service vehicle.
The proposed framework aims to end the industry's legal grey area status and includes provisions for the issuance of licenses without specifying any restrictions on the number of licenses that can be issued. The chief executive in Hong Kong has the power to make regulations regarding fares and fees for public service vehicles, excluding buses operated under a franchise.
Currently, ride-hailing platforms operating in Hong Kong include Uber, Tada, Amap, and Didi Chuxing. The name of the main person responsible for investigating the possibility of price regulation for passenger services in Hong Kong is not publicly specified.
A source suggested that regulating the number of ride-hailing licenses instead of prices could avoid potential legal problems. This approach would allow the market to determine the optimal number of ride-hailing services based on demand and supply.
The Road Traffic Ordinance contains a section that provides for the fares of public service vehicles other than buses operated under a franchise. The ordinance does not specify any requirements for vehicle age or insurance for ride-hailing services, a point that has been reiterated in the proposed framework.
As the regulatory framework moves forward, it is expected that the ride-hailing industry in Hong Kong will become more transparent and structured, providing a safer and more reliable service for passengers.
