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App-based cab service is a reality

Ride-sourcing's disruption of Hong Kong's traditional taxi system should be legalised and regulated, not penalised

Hong Kong is far behind other cities which have embraced ride-hailing and ride-sharing services, said Damian Kassabgi, Uber's director of public policy for the Asia-Pacific, in a recent interview.

Hong Kong

EVER been stuck on a mountain top looking for a ride down or in need of scheduling transport to an important event during a heavy downpour in Hong Kong?

If so, you would probably have, like me, been turned down by traditional taxi services ("Sorry we don't want to go to remote, hilly places") or been turned off by the thought of having to worry over flagging down a cab in the rain and making it to your event on time.

Those are just some of the times Uber has come to my rescue after just a couple of taps on my phone, with travel details and prices agreed upon in-app and fuss-free.

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There is certainly demand in Hong Kong for app-based ride-sourcing and ride-hailing services such as those provided by Uber, which has served about one million here since it launched in 2014.

But the same city authorities touting Hong Kong's transformation into a "smart city" driven by technology and innovation continue to resist Uber's disruption to the traditional taxi service system.

Uber drivers are technically operating illegally in Hong Kong, as hire car permit regulations have not been updated to accommodate app-based ride-hailing and ride-sourcing, despite repeated calls from the company's top management for changes to be made.

Under the Road Traffic Ordinance, using a car for hire without a permit is a criminal offence punishable by fines and imprisonment, and police have conducted a string of stings to arrest Uber drivers, with the latest and biggest crackdown two weeks ago resulting in 22 drivers being nabbed.

Last January, two former Uber drivers were convicted of driving without a permit or third-party insurance and each was dealt a HK$7,000 (S$1,241) fine and a one-year driving ban.

Uber in February announced it had purchased third-party insurance with AIG in line with laws, but less than a month later, another five Uber drivers were convicted of the same charges. The five are appealing, and their lawyer has pointed out in court that the existing car hire permit framework makes it impossible for ride-sourcing drivers to obtain the required documents.

Permit regulations stipulate that private cars may only operate from a specified and registered address. Drivers holding permits are also prohibited from operating by transmitting or receiving radio messages.

These put Hong Kong far behind other cities which have embraced ride-hailing and ride-sharing alongside new technology for the taxi industry, said Uber's director of public policy for the Asia-Pacific, Damian Kassabgi, in a recent interview with The South China Morning Post.

Mr Kassabgi, who is based in Singapore, lauded the Lion City for successfully setting up a system to register and regulate Uber drivers, who have to apply for a special licence and meet certain requirements before they can take on work under Uber.

The latest crop of Uber driver arrests in Hong Kong has prompted the company to seek a meeting with new Chief Executive-elect, Carrie Lam, to negotiate a regulatory framework that would cover app-based ride-sourcing and ride-hailing.

It is a move that demonstrates Uber's unwillingness to bow out. The arrests and court action also appear to have done little to quell both demand and supply - thousands of customers have taken to a new Uber web page to share their support for the service, and there seems to be no lack of Uber drivers ploughing Hong Kong's streets. (According to Mr Kassabgi, there are more than 30,000 Uber drivers in the city, of which 80 per cent work part-time.)

Mrs Lam's office has yet to announce any response to Uber's request, but any forward-thinking administration should recognise that competition and advances in technology breed disruptors like Uber, which in turn can contribute to an innovation-led economy.

Penalising such businesses, rather than legalising and regulating them, is a loss for both sides.