Hong Kong tries to find the right balance between ride-hailing cars and taxis

Hong Kong is moving to introduce a new regulatory framework for ride-hailing services. The decision marks a significant shift in how the city governs its point-to-point transport sector.

The move aims to formalize operations of ride-hailing platforms and control their growing influence, fueled by complaints about service offered by traditional taxis. At the same time, Hong Kong government wants to the protect the interests of traditional taxis, showing the strong lobby that this industry still exercises on city gremiums.

More controls on ride-hailing platforms

The Transport and Logistics Bureau recently unveiled its new proposal. It outlines a comprehensive licensing system for drivers, vehicles, and platform operators. The blueprint includes a yet-to-be-determined cap on the number of ride-hailing vehicles permitted to operate, alongside a levy imposed on platforms for each completed trip. The government wants also to launch a licensing fee, based on fleet size.

Hong Kong refers to the example of Australia’s Victoria state. The latter implemented a similar levy when legalizing ride-hailing, using the revenue to compensate taxi drivers affected by the changes. Hong Kong appears to be pursuing a comparable path—supporting the taxi industry while creating space for new transport models.

The planned regulation has been necessary as it follows years of tension between taxi drivers and ride-hailing operators. Taxi drivers have long complained about unfair competition, alleging that many app-based drivers lack valid hire-car permits. Platforms, meanwhile, argue they offer superior services through app-based booking, real-time tracking, transparent pricing, and user feedback systems.

According to a government survey conducted between November 2024 and January 2025, ride-hailing services now account for 22 per cent of the city’s 880,000 daily point-to-point passenger trips, with taxis covering the remainder.

Enhancing the notoriously bad service of Hong Kong traditional taxis

The move to regulate comes as Hong Kong sees growing competition in the ride-hailing space. Uber, which entered the market in 2014, initially dominated but now faces rivals such as Tada, Didi Chuxing, and Alibaba-owned Amap.

Transport Secretary Mable Chan, assuming office since December, has identified resolving the conflict as a priority.

Alongside the regulation plan, the government has issued licences for five new premium taxi fleets aimed at offering higher-quality services… at higher fares! The goal is to modernise taxi services and address complaints of overcharging and refusal of service—particularly from tourists.

Observers believe the new framework signals not just regulatory oversight. It is also the government’s intent to share in the profits of a fast-growing market. By enforcing levies and licences, authorities hope to both control and benefit from the industry’s growth.

It is a truly delicate balance to be found not only between the traditional red and white taxis and ride-hailing platforms. But also between users and transport providers. Meanwhile, the one to be sure to profit from the changes is Hong Kong Financial Services and Treasury Bureau.