Recently, AutoNavi, a digital map and navigation service provider backed by Alibaba, quietly launched taxi services in Hong Kong, including instant car booking and airport transfer services.
According to AutoNavi, the service was launched during the Spring Festival period to facilitate two-way travel for residents of mainland China and Hong Kong.
However, users who have already experienced AutoNavi Taxi in Hong Kong told reporters that currently they can only hail taxis and cannot call private cars registered as online car-hailing services.
AutoNavi’s taxi interface shows that there are currently two options in Hong Kong: ‘chartered taxis’ and ‘metered taxis.’ AutoNavi stated that this service is a collaboration with Hong Kong taxi companies, similar to the mainland’s ‘network integration’ model (providing online booking functions to traditional cruising taxis).
As another transportation platform, DiDi Global Inc. also officially entered Hong Kong in 2018, similarly providing taxi services to users using taxis. According to DiDi data, during the New Year holiday in 2024, demand for using the DiDi app for hailing cabs in Hong Kong increased by nearly 450% compared to last year. Ports of entry and exit, hotels, and Hong Kong International Airport have become the most popular areas for hailing cabs.
In Hong Kong, besides taxis, ride-hailing services have long been in a gray area. Only those who hold a taxi license are allowed to own and operate taxis, while private cars without a business license but still carrying passengers for payment are called unlicensed cars(‘white plate cars’), which involves illegal passenger transportation for payment.
Since 1994, the Hong Kong Transport Department has stopped issuing taxi licenses for the urban and New Territories areas. Subsequently, licenses have been periodically put up for public tender to alleviate traffic congestion, with no further increase since 1998. Currently, the total number of taxi licenses in Hong Kong is stable at around 18,000. In a situation of limited supply, they have become a tool for investment speculation.
In 1986, the price of a taxi license plate in Hong Kong’s urban area was HK$300,000. By 2008, it had soared to HK$3.5 million and continued to rise annually. In 2015, it reached a record high of HK$7.2 million. During the pandemic, taxi license prices slumped but saw some recovery after easing restrictions. However, they have been declining again this year and according to the Hong Kong Taxi Exchange (HKTEx), the latest price has dropped below HK$3.3 million.
In 2014, ride-hailing platform Uber entered the Hong Kong market and gained popularity but faced backlash from the taxi industry due to a large number of unlicensed vehicles picking up passengers on its platform.
These unlicensed vehicles have much lower operating costs compared to taxis, including no license fees, no insurance premiums, and no need for annual vehicle inspections. The taxi industry believes that this constitutes unfair competition, squeezing the living space of practitioners. Due to non-compliance with regulations, the police have repeatedly prosecuted unlicensed drivers for illegal passenger-carrying for reward. In August 2015, the Hong Kong police raided Uber’s office in Hong Kong and arrested five drivers on charges of “illegal passenger-carrying.” However, even now, unlicensed vehicles on Uber can still operate normally in Hong Kong.
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“The mainstream taxi-hailing apps currently are HK Taxi and Uber; HK Taxi can only call taxis while both taxis and ride-hailing cars can be selected on Uber,” said Mr. Hu from Hong Kong. “Compared to traditional phone calls or hailing directly on the street, people are now accustomed to calling cars through platforms. Young people prefer ride-hailing because drivers are younger, there is a wider selection of car models available, and the service is better. Taxis offer better value for money as they are about 20% cheaper than ride-hailing cars.
Many Hong Kong citizens believe that Hong Kong taxis often refuse passengers and charge unreasonably, so ride-hailing services can better meet their travel needs. However, the Hong Kong government also warns that if accidents occur while riding these unlicensed vehicles, passengers may not be able to hold anyone accountable.
For tourists, taking a taxi in Hong Kong can also be somewhat inconvenient.
For mainland users, the biggest advantage of DiDi and AutoNavi in Hong Kong is that they can directly settle payments in RMB through their already bound payment methods, eliminating the need for currency exchange. The platform dispatching also solves communication issues.
However, Mr. Hu emphasized that although DiDi can be used in Hong Kong at present, there are very few vehicles on the platform, and only orders from a distance are relatively easier to get a ride. He has not seen any promotion of AutoNavi’s taxi service in Hong Kong yet.
For AutoNavi which quietly entered Hong Kong, how to compete with local taxi software as well as early market entrants like Uber and DiDi under the restrictions on ride-hailing services will be a long-term challenge it needs to face.
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