Hong Kong to cap ride-hailing permits amidst road, transit concerns

The government cited road capacity and public transport demand in new rules.

Chief executive John Lee said that the government will limit the number of ride-hailing vehicle permits issued as it finalises new rules for the sector, citing road capacity and public transport usage as key considerations.

Speaking ahead of the Executive Council meeting on 19 May, Lee said the government would balance public transport demand, traffic conditions, and market data when drafting subsidiary legislation for ride-hailing services.

He noted that nearly 90% of daily passenger trips in Hong Kong are made using public transport, adding that authorities also need to consider the city’s road capacity when setting controls on ride-hailing vehicles.

Hong Kong enacted principal legislation last October to regulate ride-hailing services, including a framework for licensing platforms, drivers, and vehicles.

The law also requires the government to control the number of permits issued.

Analysts previously told Hong Kong Business that caps on ride-hailing vehicles could lead to supply shortages, higher fares, and longer passenger wait times if the number of permits is set too low.

Lee said the government also plans to establish a mechanism to monitor market operations and review data on an ongoing basis.

He added that the regulatory regime is intended to ensure ride-hailing services operate legally whilst maintaining competition and complementarity between taxis and ride-hailing operators.

Authorities will also introduce stricter penalties and tighten vehicle authorisation arrangements to combat unlicensed ride-hailing operations, Lee said.

The government aims to submit subsidiary legislation to the Legislative Council within the first half of the year after considering stakeholder feedback and reviewing market data.