Two drivers for ride-hailing app Uber have each been fined HK$7,000 and given a one-year suspension of license after pleading guilty at Kowloon City Magistrates' Court on Friday to accepting passengers without a for-hire permit and valid third-party insurance.

Although the sentence was seen as the first step for the government to charge Uber, legal experts said the company did not necessarily violate the law. They also urged the authority to review the city's current Road Traffic Ordinance to catch up with the new wave of technological advances.

The two drivers, Aaron Lam and Walter Kwan, were among seven Uber drivers charged with the same offenses. They were arrested in a special operation by the Hong Kong police over suspected illegal car services last August.

The cases for the other five drivers were adjourned until Feb 24.

Lam's lawyer asked for leniency as Lam was his family's sole breadwinner and had no criminal record.

Kwan, who was not represented by a lawyer, said Uber misled him by promising to have him covered under a global insurance policy. However, he had never seen any relevant documents. Thus, he decided to accept his responsibility and plead guilty.

Commissioner of Police Stephen Lo Wai-chung said police had consulted both the Department of Justice and insurance industry opinions before conducting the operations. He stressed a lack of proper insurance imposed great risk to passengers and even pedestrians.

Founder and principal solicitor at Phyllis KY Kwong & Associates Phyllis Kwong Ka-yin said at this stage she could not see a solid foundation to prove Uber guilty. Meanwhile, she felt the sentence was not fair for the drivers as the current ordinance was way behind the times.

Thus she urged the government to review the relevant law to set clear guidance for car-service companies and drivers as soon as possible. The key is how to set the threshold for a hire car permit, Kwong added.

Barrister Albert Luk Wai-hung felt the company could mount a defense that the income those drivers got from the business obtained through Uber was not a "salary" but something that had no relation to taking passengers.

However, he did not rule out possible liability - saying the responsibility of Uber executives hinged on their knowledge of and involvement in drivers transporting passengers without permits.

luisliu@chinadailyhk.com