Should Hong Kong Revise Its Ride-Hailing Regulations?
According to the research publication titled “Taxi services in Hong Kong” dated 27th February 2025 from the Research and Information Division of the Legislative Council Secretariat (“the LegCo 2025 Data”), ride-hailing platforms have been operating in Hong Kong since 2014, with driver estimates ranging from 4,000 to 200,000. However, the Transport Department has only approved a maximum of 1,500 licenses for hire or paid passenger transport. Under Section 52(3) of the Road Traffic Ordinance (Cap. 374) (“the Ordinance”), no person shall drive or use a motor vehicle for the carriage of passengers for hire unless it meets specific conditions outlined in the Ordinance, such as holding a valid license; otherwise, it is deemed illegal. Consequently, many argue that most ride-hailing services currently offered (commonly known as “pak pai” services) are illegal.
Legalization: Open or Regulate?
Hong Kong has embraced a free-market economy, and since the introduction of Uber in 2014, the government has maintained a relatively lax approach. However, the growth of ride-hailing services has posed a threat to the traditional taxi industry, raising questions about the legality of these services and prompting calls for action against illegal “pak pai” services.
According to the Hong Kong Taxi Exchange (HKTEx), taxi license prices once peaked at HKD 7 million, but as of 1 January 2024, they have fallen to HKD 2.66 million for New Territories taxis and HKD 3.29 million for urban taxis. The Legco 2025 Data indicates that the taxi service industry in Hong Kong has declined over the past decade, with average daily ridership in 2024 down 29.4% compared to 2015. This decline can be attributed to various factors, including criticisms of taxi service quality and heightened competition from expanded MTR services. The taxi industry has even considered strikes at the end of 2023 and early 2025 due to the impact of “pak pai” services on their livelihoods. Although these strikes were ultimately averted to maintain public services, they have spurred the Hong Kong government to review the potential for legalizing or regulating ride-hailing services.
Current Regulations and Challenges
- Shenzhen: Ride-hailing platforms must hold a permit for the operation of online hailing of hire cars (《網路預約出租汽車經營許可證》) and ensure that drivers and vehicles are licensed and insured, along with regular safety inspections.
- Singapore: Large fleet operators must hold a Hire Car Licence issued by the Land Transport Authority and ensure that drivers and vehicles are licensed and insured.
- London: Operators must obtain government-issued licenses and establish the platform under a local company, ensuring all drivers and vehicles are licensed and insured, with drivers passing physical examinations and background checks.
In Hong Kong, existing laws inadequately regulate ride-hailing operations, lacking essential provisions such as restrictions on drivers’ age and experience, vehicle quality checks, and insurance requirements. This not only compromises passenger safety but also hinders the healthy development of the ride-hailing market.
Chief Executive of the HKSAR Government John Lee stated in February 2025 that the Hong Kong government’s position is to “improve taxi services, regulate ride-hailing platforms, and combat unlawful “pak pai” services.” This indicates the government’s intention to enhance traditional taxi services while exploring regulatory frameworks for ride-hailing to foster fair market competition.
