HK to raise cab fares again

HONG KONG - Taxi fares in Hong Kong are going up on Sunday, the second increase in two years.

The new flagdown fare is HK$22 (S$3.60), up from HK$2. Passengers also have to pay HK$1.60 - instead of HK$1.50 now - for every 200m after the first 2km. This means an overall increase of 7 to 9 per cent, depending on the trip.

The fare hike is due to an increase in operating costs ranging from fuel expenses to insurance premiums, said a Transport Department spokesman.

While there is some talk that the fare hike may lead to an initial 10 per cent drop in passengers, it is unlikely to significantly affect the role that taxis play in Hong Kongers' transport needs. After all, taxi rides here are cheap, fast and basic.

Hong Kong's 18,138 taxis make an average of 900,000 trips a day, about the same number made by Singapore's 28,000 cabs.

Their niche in the city's transport system is in providing short-distance trips, such as between an MTR station and the ultimate destination.

A trip from Central district to Causeway Bay, a distance of about 4km, will cost roughly HK$40 after the increase. This is equivalent to the $7 charged to get from Shenton Way to Orchard Road - but minus surcharges and road tolls.

In fact, it is cheaper for a group of four here to share a taxi, than it is for them to take the bus.

How easy is it to hail a cab? According to the most recent survey conducted in 1998 by the government, almost half - 44.6 per cent - of the respondents waited under one minute.

Of those who waited longer, 90.8 per cent cooled their heels for a median time of 31/2 minutes. Tolerable, they say. The rest waited 101/2 minutes.

Fifteen years on, anecdotal evidence suggests that passengers are having to wait longer, especially during peak hours and on rainy days, although the situation is still "by and large good", says economist Wong Ka Fu who has studied the taxi market.

One reason is the tightly regulated industry. The government, which sets the fare, has not issued any new licences since 1994. Those who own the licences - which are traded on the market and cost HK$6.8 million each - set the rent.

Not wanting to antagonise these investors is why the government is loath to expand the pool, says transport analyst Hung Wing Tat.

In turn, drivers have to "max out" the time, by picking up as many passengers as they can. Within these parameters, however, there is some allowance for flexibility, with a flourishing underground patchwork of informal contracts, done through prior phone bookings.

Discount taxi groups offer up to 40 per cent off during off-peak hours and for longer-distance trips. Conversely, passengers are happy to pay more during peak times.

Parents are known to hire taxis on a monthly basis to ferry their children to school, says Dr Hung.

Office workers also call on their favourite cabby for rides to work. Such practices are legal.

All these make driving a taxi a viable occupation, especially for the less educated, says Mr Lai Ming Hung, who represents drivers as chairman of the Taxi and Public Light Bus Concern Group.

A cabby, who pays about HK$400 in rent for a 12-hour shift, picks up 25 passengers on average.

The trips yield a monthly income of HK$14,000 to HK$15,000, he said.

"It is not that bad and they can raise a family."

That said, the industry is not without its challenges.

The high-volume, low-cost model means that service standards suffer, says Dr Hung.

From January to October, there were 485 complaints, mostly about poor attitude and over-charging.

This has wider ramifications, such as more people opting to get their own set of wheels. With annual growth of 4 per cent in recent years, there are now 494,464 private cars.

Dr Wong believes de-regulation, to allow for differentiation of services, may be a solution. But some users, Singaporeans among them, may think it better not to fix something if ain't broke, yet.

xueying@sph.com.sg

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