Disruptive as it is, innovation is simply unstoppable. Innovative products or services are always received enthusiastically by consumers whenever they emerge in the market because they cater to their needs. Mobile car-hailing services are no exception, as has been evidenced by their phenomenal rise globally despite frantic efforts to nip them in the bud by those who feel their own interests are being threatened. It therefore makes sense for the Consumer Council to call for the formal introduction of ride-hailing services into the local transport market and its regulation.

By taking advantage of versatile and ever-developing internet technologies, mobile ride-hailing operators can provide more efficient services to passengers who need personalized point-to-point car transport than ordinary taxis do. It is thus conceivably possible that the proliferation of ride-hailing services could pose strong competition to ordinary taxis. This is particularly true given that the quality of local taxi services has been the target of constant criticism from passengers.

Allowing more competition in the market by introducing mobile ride-hailing services will undoubtedly go a long way toward helping ordinary taxis improve their services and therefore their competitiveness. Where there is a will, there is a way - the old saying puts it well. Indeed, there is no conceivable obstacle that will prevent taxi operators from effectively improving their services. And like any other sectors in the economy, there is no valid reason of any kind for the taxi trade to oblige the government to shield them from competition. After all, competition is one of the key features of the freewheeling capitalism Hong Kong has relied on to succeed.

Perhaps, the real worry is the possibility of a steep fall in the market price of taxi licenses, which would inevitably destroy a great volume of paper wealth. Speculation has sent the market price of a taxi license to a staggering level of as much as more than HK$7 million, a price tag unimaginable anywhere else in the world. Already the government's early plan to introduce premium taxis into the market has triggered a significant correction in the prices of taxi licenses. Understandably, some investors have suffered losses as a result.

But taxi license investors have no grounds at all - whether moral or legal - to blame anyone, including the government, for losses caused by a decline in taxi license prices. Investors, or speculators in some senses, are fully aware they are the only parties who should be responsible for their own investment decisions. The regulatory authority who issued the licenses has never promised it would put a cap on the number of licenses; nor has it suggested taxi licenses are intended for investment or speculation.

That said, there is a strong case for subjecting ride-hailing services to comprehensive regulation in the same way as any other sector is supervised and regulated - for the sake of fairness as well as safety for passengers. A progressive and transitional approach to the introduction of ride-hailing services to minimize disruption to existing taxi operators, as the Consumer Council suggested, is perfectly appropriate.

(HK Edition 11/29/2017 page7)