Chief Executive in Council approves taxi fare adjustments

     The Chief Executive in Council approved today (February 7) adjustments to the urban, New Territories (NT) and Lantau taxi fares, with increases of $2 in flagfall charges, $0.10 in the incremental charge for the first-tier distance and $0.20 in the incremental charge for the second-tier distance after flagfall. Details of the new fares are as follows:

                              Flagfall charge for the first 2 kilometres
                                          or any part thereof
                               Urban taxis    NT taxis    Lantau taxis
Existing fare                  $22           $18.50         $17
Approved new fare         $24           $20.50         $19

                                          Incremental charge
                           for each 200 metres travelled after flagfall
                               Urban taxis     NT taxis    Lantau taxis
First-tier distance          2-9 km        2-8 km       2-20 km
Existing fare                 $1.60           $1.40          $1.40
Approved new fare        $1.70           $1.50          $1.50

Second-tier distance    after 9 km     after 8 km   after 20 km
Existing fare                 $1               $1              $1.20
Approved new fare        $1.20            $1.20          $1.40

     There will be consequential amendments to the charge for the waiting time because of the increase in incremental charges after flagfall. At the same time, the additional fare for every article of baggage carried by the three types of taxis will be increased by $1, from $5 to $6. Other charges remain unchanged.

     A spokesman for the Transport and Housing Bureau said that in considering the taxi fare increase applications, the Government has taken into account various relevant factors including changes in revenue and operating costs of taxi operators, public acceptability, and the fare differential between taxis and other modes of public transport.

     The urban, NT and Lantau taxi trade submitted fare increase applications to the Transport Department in April 2016 for increasing the flagfall charges by $2, $2.50 and $4 respectively, as well as increasing the incremental charges for the first-tier distance by $0.20 and the second-tier distance by $0.20 after flagfall. The trade also applied to shorten the waiting time from 60 seconds to 45 seconds per jump. Furthermore, the three taxi trades applied for a $1 increase in the additional fare for every article of baggage carried. The Lantau taxi trade also individually applied for a $1 increase in the additional fares for every animal or bird carried, and every hiring arranged through telephone booking. The Government consulted the Panel on Transport of the Legislative Council (LegCo) and the Transport Advisory Committee on the applications.

     "Taxis provide the public with a personalised, point-to-point public transport service other than mass public transport services. Since the last fare increase of urban, NT and Lantau taxis in December 2013, there was a slight increase in real terms in the average monthly net income of rentee-drivers of the three types of taxis in January to June 2016 as compared with January to December 2014, mainly because the fuel cost remained at a low level over the past two years. However, the upside risk of fuel prices, persistent inflation and the commissioning of new railway lines might lead to a drop in the real income of rentee-drivers. In fact, the average monthly net income of rentee-drivers is lower than the general average salary of the transport trade. It is difficult to attract new blood for the trade and there is an ageing trend in the trade. The trade hopes that through increasing drivers' income, new blood will be injected into the trade, and the trade will be encouraged to improve its service and invest more in new facilities, so as to enhance the overall taxi service quality," the spokesman said.

     "The Government is mindful that the fare increase will bring extra transport expenses to passengers. Therefore, in processing the fare increase applications, the Government has duly considered various factors and endeavoured to strike a balance among various concerns so that the adjusted fares are set at a level generally acceptable to stakeholders. The Government has also moderated the fare increase proposed by the three taxi trade. In fact, according the Government's recommendation, the average increase rates of urban, NT and Lantau taxi fares are 9.98 per cent, 11.15 per cent and 8.60 per cent respectively. This is on par with the forecast inflation (i.e. 9 per cent) between the last fare increase and the second quarter of this year (when the new fare increase is expected to take effect). Further, the Median Monthly Household Income has increased by 13 per cent from the last fare increase to the third quarter of 2016," the spokesman continued.
     In addition, the Government notes that the public is concerned about the quality of taxi service. The trade also accepts that the service should be improved. In this regard, the trade has introduced or considered various measures, such as introducing a retraining programme with the Employees Retraining Board for taxi drivers in order to enhance their service standard, as well as launching a mobile application for hailing taxis. Passengers may hail taxis through the application and choose taxis that are driven by certified drivers, as well as rate the drivers' performance. More operators are also providing pre-booked taxi service of higher quality in the form of hire-as-a-whole service in accordance with the law. The number of such taxis with larger compartments and better facilities has increased from about 20 in early 2015 to over 150 at present. The Government will continue to maintain close dialogue with the trade with a view to enhancing the service standard. As for the proposal to introduce premium taxis, the Government will report to the Panel on Transport of the LegCo on its recommendations in the first quarter of 2017 in the context of how to enhance personalised point-to-point transport services.

     As the scale of taxi fares is specified in Schedule 5 to the Road Traffic (Public Service Vehicles) Regulations, legislative amendment is necessary to effect the taxi fare adjustments. The amendment will be tabled at the LegCo on February 15 for negative vetting. Upon completion of the procedures, the new fares will take effect from April 9 this year.

     The spokesman said taxi drivers are required to display in a prominent position inside a taxi the fare conversion table specified by the Commissioner for Transport until the taximeter has been calibrated to reflect the new fares approved by the Chief Executive in Council.

     The taxi fare increases should have a negligible impact on inflation in 2017 and will lift the Composite Consumer Price Index by only 0.03 of a percentage point in 2017.

Ends/Tuesday, February 7, 2017
Issued at HKT 15:50