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Consultation Paper  on  Taxi Licence System

30th September, 1997  

Secretary  
Working Group on Taxi Policy Review  
Transport Advisory Committee  
c/o Transport Bureau  
2/F Central Government Offices (East Wing)  
Lower Albert Road, Hong Kong  

Dear Sir  

CONSULTATIVE PAPER ON TAXI LICENSING SYSTEM  

We are responding to the above consultation paper with our comments.  

We believe that the overriding criterion for making policy decisions on taxi licensing is whether the system ensures the delivery of a service that best meets the needs of the public. We feel that the current system, whatever it may achieve in raising revenue for the Government, does not meet this criterion. Observable shortcomings in the service provided by Hong Kong's taxis include the following:  

• The honesty and courtesy of drivers; 
• The standard of driving, in terms of both care and skill; 
• The drivers' knowledge of the roads; 
• Drivers' willingness to take passengers; 
• Standard of vehicle maintenance, including exhaust emissions; 
• Willingness to help passengers with luggage, and provision of clear boot space to take luggage. 

Not only do the above shortcomings inconvenience the public but they also diminish HK's attractiveness to tourists.  

We feel that too much of the paper is dedicated to addressing financial aspects of the ownership of licences, such as speculation, and too little to the issues of poor service delivery which we feel is the real issue. Where the Government creates a valuable transferable asset, and at the same time restricts the supply, the result in a free market economy like Hong Kong will be speculation in this asset. Addressing speculation through administrative restrictions, as the paper suggests, is at best irrelevant to the real issue, and at worst may distort ownership patterns with an even more detrimental effect on service.  

We propose that the Working Group should consider radical change to the current system, namely the issuance of licences to individual drivers who have passed appropriate tests. The Government's role would be to ensure the setting up of appropriate training, examination and inspection facilities, although in due course these could perhaps be provided by the private sector, and the setting of fare levels. These new arrangement would have to be phased in over period of say three years. It might be necessary to pay some compensation to existing licence holders, although possibly this could be restricted to the premium that was originally paid by the holder. In any event, the Government would appear to have ample funds to manage the transition.  

We would draw attention to the practice in London, where taxi drivers are licensed individually and have extensive training to acquire "the knowledge" of London's streets. The service from London taxi drivers is surely one of the best in the world in terms of all of the factors mentioned above, elevating taxi driving to the level of a profession.  

The paper does mention alternatives. Of these, 10(a) and (b) are not acceptable. 10(c) would leave the Government managing the taxi fleet, which would appear undesirable. Options (d) and (e) would appear better than the current system, but would need considerable reinforcement to ensure the quality of service provided by the individual drivers. Option (f), driver cooperatives, appears unattractive, as these could easily fall prey to triad forces; again it is not easy to see how individual service quality could be ensured. We believe that there is no better option than to licence individual drivers based on a skill assessment, following London - the practice that produces the best results as a model.  

We hope that the above comments are helpful.  

Yours sincerely,  

Mr. Alan LUNG Ka Lun  
Chairman