Hong Kong Ride-Hailing Cap: Government Calls 10,000 Permits a 'Prudent' Start, Uber Warns of Service Impact

Hong Kong Government Defends Ride-Hailing Cap as 'Prudent' Starting Point

Hong Kong authorities have set a proposed cap of 10,000 vehicle permits for ride-hailing services, a number the transport minister called a “prudent and safe starting point” that will be adjusted dynamically based on operational data. The plan, which is part of a new regulatory regime scheduled to be passed by lawmakers in July, has received support from mainland Chinese operators Amap and Didi Chuxing, but faces opposition from Uber, which warns of higher fares and reduced service quality.

Secretary for Transport and Logistics Mable Chan said on Wednesday that the government would monitor the market closely and adjust the quota based on data from licensed platforms, including the number of orders dispatched and cancelled, active driver hours, and completed rides. “As a start, we would like to take a prudent, careful approach to ensure that our proposed regulatory regime will be achieved and implemented in a safe, smooth and progressive manner,” Chan said. She stopped short of setting a specific timeline for reviewing the cap despite repeated queries from lawmakers.

Chief Executive John Lee Ka-chiu echoed Chan’s remarks, stating that the cap should strike a balance among public travel needs, road capacity, and the need for ongoing, dynamic assessments. “First, address public travel needs so that the riding experience remains more or less the same,” Lee said, adding that the city’s unique transport landscape—where nearly 90 per cent of trips are made using public transport—would also factor into quota decisions.

The proposed cap has drawn mixed reactions from industry players. Amap and Didi Chuxing, both of which operate in Hong Kong’s regulatory vacuum, submitted statements to the Legislative Council backing the government’s plan. Amap said the cap “fully considered” Hong Kong’s urban conditions, balancing demand while “avoiding cutthroat competition” and road congestion. “Amap highly recognises the prudent attitude of ‘total volume control and dynamic assessment’,” the company said in its submission. Didi said it understood that the new scheme must account for safety, order, stability, and passenger needs.

Uber, however, has warned that the cap could lead to a 70 per cent increase in fares and cause 40 per cent of peak-hour bookings to fail. In a paper submitted to the legislature, the company said it currently has more than 30,000 active drivers in the city, and the proposed quota would slash their workforce by as much as 50 per cent. Uber also released a survey conducted last month, which it said drew 10,009 passenger respondents, 90 per cent of whom considered the cap “very insufficient.” Nearly 75 per cent of the 4,569 drivers surveyed felt “extremely concerned” about the cap, according to Uber.

“The survey results reflect riders’ and drivers’ honest feedback to the government’s proposed ride-hailing regulations,” Nicole Lee Tsz-yu, Uber Hong Kong’s head of public policy and government affairs, said in a statement. The company argued that the cap failed to account for growing demand and could result in a significant service gap.

Regulatory Framework and Data Security

The government’s plan, which was first outlined last week, would require ride-hailing platforms, drivers, and vehicles to obtain separate licences or permits. Officials plan to table subsidiary legislation in the Legislative Council before the summer break in late July, with platform licence applications expected in the third quarter and vehicle and driver applications in the fourth quarter.

At a Legislative Council panel meeting on Monday, transport officials also addressed data security. Chan said the government would “actively explore” the secure storage of ride-hailing data, emphasising the importance of privacy and national security. “Our principle and emphasis are on the protection of data safety and national security. The storage, transfer, and backup of data have to be conducted securely,” she told lawmakers. Deputy Secretary for Transport and Logistics Kirk Yip Hoi-ying said the regulation included clauses related to protecting national security in platform licences, and that personal data collected could only be used for providing ride-hailing services, with clients’ approval required first.

Chan also confirmed that authorities would not favour existing ride-hailing platform drivers in the allocation of permits, citing concerns about encouraging illegal activities and difficulties in execution. “Current ride-hailing drivers are engaging in illegal activities. The government also cannot distinguish whether a driver has offered ride-hailing services,” she said.