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LCQ7: Personalised and point-to-point transport services
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     Following is a question by the Hon Andrew Wan and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (June 28):
 
Question:
 
     The Public Transport Strategy Study (PTSS) published on the 7th of this month has reviewed personalised and point-to-point public transport services, namely taxi service and hire car service. In response to the demand in the community for the personalised and point-to-point public transport services which feature better service quality and higher fare, PTSS has proposed that the next-term Government should enact the relevant bill as early as possible for the implementation of franchised taxis on the basis of the proposal put forward by the current-term Government. As to whether the introduction of other new services (such as regulated online car hailing service) should be explored, the decision would depend on the outcome of the scrutiny of the bill on franchised taxis by this Council. Some members of the public consider the fact that PTSS has made no mention of the regularisation of the emerging online car hailing service (such as Uber) indicates that the authorities have turned a blind eye to the increasing prevalence of such service in a number of places in the world. For example, as at the middle of last year, the number of registered Mainland users of an online car hailing company exceeded 250 million with 14 million drivers signed up, reflecting the considerable popularity of online car hailing service on the Mainland. In this connection, will the Government inform this Council:
 
(1) as the authorities have indicated that the franchised taxis being contemplated can be hailed via mobile phone applications with the "online hailing" feature incorporated, of the other common features between franchised taxis and online hailed cars; how franchised taxis compare with online hailed cars in terms of numbers of vehicles and drivers;
 
(2) of the authorities' justifications for making the statement that the decision on whether to explore the introduction of other new services (such as regulated online car hailing service) would depend on the outcome of the scrutiny of the bill on franchised taxis by this Council; whether the authorities will immediately commence a study and public consultation on the regularisation of online car hailing service;
 
(3) as the authorities regularised "white licence" private cars in the seventies of the last century to make them become the current public light buses, whether the authorities have assessed if the considerations for doing so in the past may now be used as reference in the study on regularisation of online car hailing service; and
 
(4) whether the authorities have made reference to the experience of other countries/regions in integrating online hailed cars into the public transport system; if so, of the countries/regions the experience of which they have made reference to and the conclusion so drawn; if not, the reasons for that?
 
Reply:
 
President,
 
​     The Government has all along been encouraging the use of new technology for enhancing public transport services. Yet, while using the new technology or platform, the provision of passenger services must be lawful to protect the passengers' safety and public interest. If passenger services are not regulated, they can be freely expanded. This may in effect encourage illegal passenger services. As a result, the orderly planning of public transport system would be disrupted, thereby affecting the cornerstone of the public transport services used by 90 per cent of the commuters at present as well as road traffic. My consolidated reply to the various parts of the Hon Andrew Wan's question is as follows:
 
​     On the premise that the provision of any passenger services must be lawful, we agree that the new demand in the community for personalised and point-to-point public transport services of higher quality and fare should be well-addressed. To this end, the Government has conducted a comprehensive review on the personalised and point-to-point transport services (including taxis and hire car services) under the Public Transport Strategy Study over the past two years and recommended the introduction of new "franchised taxis".
 
​     Franchised taxis will be a type of public transport services operated through a franchise model. Areas such as the number, service, fares as well as drivers' quality of franchised taxis will be regulated by the Government. The cap on the number of franchised taxis will be stipulated in the law. The present proposal on the cap (i.e. 600 vehicles) is decided after balancing various considerations (such as service demand, impact on road traffic as well as long-term development of various public transport services). Any change to the cap in future must take into account factors such as supply and demand of franchised taxis, the overall balance between public transport services as well as road traffic. We propose that the cap will be subject to legislative scrutiny.
 
​     Franchised taxis will be operated under fleet management. This will help address the current difficulty in managing centrally the service quality of ordinary taxis due to scattered ownership. The fares of franchised taxis will be charged according to meters providing transparency to passengers. Franchise terms will clearly prescribe the service level and set service standards in respect of vehicle types, compartment facilities, limit on vehicle age, arrangement of mobile hailing applications (the so-called "online hailing"), service quality of drivers, etc. If an operator fails to meet the service level or standards prescribed under the franchise, the Government will be able to impose penalties through franchise terms or even revoke the franchise. Meanwhile, the franchise terms would be reviewed and amended having regard to prevailing circumstances when new franchises are to be issued.
 
​     In light of the rising popularity of "online hailing" service in the personalised and point-to-point transport service market globally, our proposed franchised taxis will have the "online hailing" features. Not only can franchised taxis be hailed on street, passengers can hail franchised taxis through mobile phone applications. The mobile phone applications will not be allowed to require passengers to provide their destinations unless the passengers opt to do so on their own volition. The operators will be required to dispatch taxis according to passengers' locations. Refusal of hire will not be allowed. Moreover, all franchised taxis will be equipped with Global Positioning System (GPS) devices. The route and fare of the journey can be provided to the passengers through the mobile phone applications. The real-time operating data of each franchised taxi, including hires for services, charges, routes and drivers' information, will be recorded by the GPS devices for the Government's inspection. Passengers can pay by cash or electronic payment. They can lodge complaints or provide comment through 24-hour customer service hotlines and electronic channels (e.g. email, online comment form or mobile phone applications). Operators will be required to handle the passengers' complaints or respond to their opinions within a reasonable period under the franchise.
 
​     In comparison with the existing illegal online hire car service, the service of franchised taxis will be regulated by the Government. This will provide better protection to passengers, ensure the service quality as well as provide transparency on the fares. To general public, having the cap on the number of franchised taxis, the impact on the road traffic would be limited. From transport policy perspective, franchised taxis can provide an additional choice for passenger and facilitate the planning and development of the public transport system in an orderly manner.
 
​     In light of the above considerations, the general support from the community on the introduction of the franchised taxis as well as the result of the consultation with the Legislative Council Panel on Transport, it is proposed that the next-term Government should prepare a Bill for early implementation on the basis of the current proposal on franchised taxis.
 
​     A number of overseas cities (e.g. Singapore and London) have introduced regulated online hire car service. Generally speaking, the operators of the online hailing platform, the vehicles for providing online hire car service as well as drivers would be required to register with or obtain licences from the local government in order to provide online hire car service. This type of service can only be hailed through online haling platform or by telephone calls. Hailing on street is not allowed. It is worth noting that this type of regulated online hire car service is not a type of public transport services. There is no control on the supply as well as fare of this type of service. Given that Hong Kong is a compact and densely populated city with limited road space, increasing the supply of personliased and point-to-point transport service without control would aggravate the burden on road traffic as well as affect the operation of the public transport services used by 90 per cent of the commuters. Under the public transport-oriented policy, we consider it more desirable to meet the public demand for online hailing service through introduction of regulated franchised taxis. We will decide whether to explore other new services (such as regulated online hailing services) depending on the outcome of the scrutiny of the proposal on franchised taxis by the Legislative Council.
 
​     In response to Hon Wan's enquiry about regularising the illegal car service in 70s (in late 60s to be accurate) of last century, the then Government regularised the minibus trade in 1969 to fill the service gap of franchised bus service when the franchised bus operators required considerable time to replenish the service level of their fleet as a result of large-scale industrial actions in 1967. Those policy considerations are no longer applicable to our present situation for enhancing personalised and point-to-point public transport services. It is worth noting that a cap has been set on the number of public light buses after the regularisation. The cap is maintained up till now.
 
Ends/Wednesday, June 28, 2017
Issued at HKT 16:00
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