Hong Kong authorities to reserve the power to regulate ride-hailing fares

Hong Kong authorities will reserve the power to regulate the fares of ride-hailing services to prevent cutthroat competition among platforms, the city’s transport minister said, despite the proposed law allowing operators to set prices freely.

Secretary for Transport and Logistics Mable Chan said on Wednesday that although ride-hailing services were typically more expensive than metered taxis, overseas experience suggested the possibility of anticompetitive practices, when there was no limit to the supply of those vehicles.

“From overseas experience, we saw cases of vicious competition, neijuan, and even cutthroat pricing strategies – we should therefore consider reserving some power to [prevent] the prices from being too low or too high, which would impact healthy competition and limit consumers’ choices,” she told a radio programme.

Originating from mainland China, neijuan refers to excessive competition where companies lower prices to gain a temporary advantage at the expense of profit margins, forcing all parties to exert greater effort and leading to stagnant or declining growth for all participants.

“Some wished the ride-hailing services would be able to fulfil the demand without being too expensive, but at the same time, the taxi trade called for a higher fare, but our priority is always the interest of residents,” Chan said.

Authorities on Tuesday submitted a proposed licensing regime for ride-hailing platforms, vehicles and drivers to the city’s legislature.