A ploy by Hong Kong taxi drivers to go undercover as Uber passengers and catch the ride-hailing drivers red-handed could end up backfiring on them, observers and business leaders have warned, as it is bringing to a head a long stand-off about the fate of such services.

As the demand for such services was obvious but was being blocked by the government, they said it was only right that authorities started addressing the issue decisively to be fair to all parties.

A business leader urged the government to stop dragging its feet to solve the deadlock on the legality of Uber’s operations, pointing out that the ride-hailing service had become popular with residents and tourists while the city’s taxis had failed to improve.

An economist said the deadlock also arose because the 18,163 taxi licences were a tradeable commodity worth millions of Hong Kong dollars and involved vested interests of their holders.

Trouble first began when the government’s trade promotion office, InvestHK, trumpeted its success in bringing in United States-based Uber to the city after it began operating in 2014, but the Transport Department then deemed it an illegal service as it needed a hire-car permit.

Uber neither owns nor hires drivers but acts as a matching service between drivers and passengers and hence this approach is not regarded as viable.

Even as it was battling the government, Uber had to reckon with taxi drivers mounting protests over the encroachment onto their turf.

Urging the government to take a stand, entertainment tycoon Allan Zeman said: “Our government has difficult decisions that they never like to make. They’re going to get criticised by taxi drivers and unions.

“Hopefully, the government will make the right decision, to finally legalise Uber. I’m telling the government to listen to the people. This is what the people want.”

Zeman, founder of nightlife district Lan Kwai Fong in Central, said the government should take the initiative to legalise Uber and give residents and tourists what they were used to.

“We’re supposed to be a world class society. Don’t go backwards. Hong Kong is facing a lot of problems at the moment. And it’s time to really move forward and make the right decisions so that Hong Kong can really get our name back in the world.”

The Transport and Logistics Bureau said the government was open to the use of various communication technologies, including the internet and mobile applications for hiring vehicles.

“But the use of technology must comply with regulations, such as the requirement for vehicles to possess a valid permit,” a spokesman told the Post on Monday.

He added the authorities had been actively seeking input and engaging with the industry regarding the handling of illegal hail-riding or unauthorised passenger transport activities.

A Uber spokesman said: “We have seen that taxi and ride-sharing can coexist well in other countries, and we stand ready to find a mutually beneficial pathway forward with the government and relevant stakeholders.”

The taxi industry, with about 46,000 drivers at present, has come under fire by some residents for its poor quality of service. The Transport Advisory Committee’s complaints unit received 11,096 complaints and suggestions on taxi services last year, 52.8% higher than in 2022.

Refusing a hire and overcharging were among top complaints.

In 2023, the government interfered in the situation by introducing a bill to tighten regulation of the private-hire vehicle industry in terms of its service quality.

So far this month, there were three rounds of undercover operations by members of a taxi union who disguised themselves as customers and reported 13 illegal ride-hailing cases involving suspected Uber drivers.

One of the locations involved Lan Kwai Fong.

Long queues waiting for cabs were usually spotted at night time outside the Landmark near Pedder Street after residents enjoying dinner or drinks at Lan Kwai Fong, Zeman said.

“If you do a good job, I guarantee you people also take taxis,” he said. “Not everybody only takes Uber. Hong Kong is a city of 7.5 million people. So there is room for everyone.”

He added the only basis for cabbies calling for outlawing Uber was the grey area existing for the ride-hailing giant where the government had shirked responsibility and not made a decision.

He noted legalising Uber could create more jobs and give young people a chance to earn extra income thus creating more spending.

“You also provide a better service for locals as well as tourists coming to Hong Kong,” Zeman said.

In 2020, Uber even expanded its services and recruited taxi drivers to join their services by rolling out Uber Taxi, which charges passengers like taking Uber services rather than metered fares.

Jonathan Wu*, a 46-year-old cabby, expressed his objection to outlawing Uber as it was one of his ways to increase income without concerning unfavourable street hails.

“Being my own boss, I believe in having the authority to make decisions for whoever I like to give a ride without saying no to their face by picking rides from apps,” he said.

“Passengers may complain about poor service from taxi drivers, but we also encounter rude and difficult passengers at times. Uber users tend to be more civilised.”

He stressed joining Uber Taxi allowed him to increase his income and other cabbies could do the same, although did not know the destination or the fare for each ride before picking up passengers.

“I don’t see why other cabbies are claiming Uber is harming their income. But their request of outlawing it will hurt mine but they just don’t realise,” he said.

Economist Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at the Chinese University of Hong Kong, said the government faced difficulties in resolving the Uber-taxi bickering because the valuation of taxi licences could hurt the vested interests of holders.

“The government is reluctant to make a move that could harm their interest as the taxi licences are financial assets that cost more than HK$3mil .

[Licence holders] will blame the government for interference but they never think about their poor service standard,” Lee said.

The price of a licence combined with a taxi reached a record HK$7.66mil in 2009 and is now priced at about HK$3.22mil .

He added the premium cab fleet would not work if the government did not involve itself in operating by repurchasing and retaining a certain number of taxi licences.

In December last year, the government said five fleets were expected to obtain licences by mid-2024 and hit the roads a year later.

Hong Kong Tourism Association executive director Timothy Chui Ting-pong said the premium taxi initiative would be the last chance to save the taxi industry.

“If the fleet is still not able to address issues such as cherry-picking passengers or providing cashless payments, it will be inevitable to further study the needs of introducing ride-hailing services or open up the market.” Chui said.

Lawmaker Johnny Ng Kit-chong said taxis and Uber did not have a “life or death” relationship, believing a balance could be achieved for coexistence.

“Ride-hailing cars cannot pick up passengers on the street, but taxis can. Both sides have their own markets, particularly if Uber-like vehicles charge more after being imposed a fee. So they can definitely coexist,” Ng said. “But further research by the government is needed.”

 - SCMP