Deep Dive: Ride-hailing platform Tada launches in Hong Kong as city considers regulations

A Singapore-based ride-hailing service provider has launched in Hong Kong. The newcomer is expected to provide competition for market leader Uber.

Tada began operating in the city earlier this month. During its beta launch, customers will be able to pay by cash or credit card. Tada will cover Hong Kong Island, Kowloon and the airport. The platform will not serve the New Territories.

The Transport Department is working on creating regulations for the ride-hailing industry. It is researching the supply and demand of personalised point-to-point transport services in the city.

“This includes gathering public opinions such as telephone surveys and on-site questionnaires to understand passenger needs and preferences, as well as considering operational models and regulatory approaches,” a department spokesman said.

The government will formulate legislative proposals for regulating ride-hailing platforms in 2025. It will also review licensing requirements for platforms, vehicles and drivers based on research findings and input from stakeholders.

Ride-hailing services have been the subject of fierce debate since Uber debuted in Hong Kong in 2014. These types of services are unregulated and technically not allowed in the city. Private vehicles providing point-to-point services – like Uber drivers – are meant to have hire-car permits.

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The existing hire-car permit quota is capped at 1,500, but Uber has more than 10,000 active drivers monthly.

Uber and Uber Taxi have more than 216,000 registered drivers. However, Uber Taxi is deemed legal as its vehicles have the required permits.

Hong Kong has 46,000 taxi drivers operating 18,163 cabs. The sector has long complained of unfair competition with the ride-hailing leader.

Tada did not say how many drivers it has recruited so far, but the app shows it is looking for private vehicles and taxis. It did not say whether the drivers have hire-car permits.

The company also said it would not require drivers to pay a commission. Uber charges drivers a certain percentage of each trip.

Tada CEO Sean Kim said Hong Kong is a good location for the company. This is because of its dynamic economy, dense population, and strong demand for transport.

“By focusing initially on key areas, we aim to provide quality service and a positive experience while gathering feedback,” Kim said.

Staff writer

1. Using the information in News, which of the following is true?

(1) Tada will not be available in the New Territories.
(2) More than 300,000 people drive for Uber and Uber Taxi.
(3) Uber is an unregulated service.
(4) Uber has more than 14,000 active drivers each month.

A. (1), (2) only
B. (2), (3) only
C. (1), (3) only
D. (2), (4) only

2. Using News, name ONE potential advantage and ONE potential disadvantage for Tada in Hong Kong.

3. Based on News and your knowledge, what effect could Tada have on services like Uber and taxis?

1. Using Graph, make TWO observations about why people become rideshare drivers.

2. According to News and Graph, why might drivers find ride-hailing services to be a more appealing job than taxis?

• Government will share its proposals with the Legislative Council next year

• Transport minister says the city’s taxi licensing system has hampered the sector’s innovation efforts and that the government should take a proactive approach

Hong Kong’s newly appointed transport minister, Mable Chan, has said she will prioritise residents’ travel needs when designing a regulatory framework for the ride-hailing industry.

Chan acknowledged that ride-hailing services were popular with residents and that the city’s taxi licensing system had hampered efforts to innovate in the sector.

Only days after replacing Lam Sai-hung as secretary for transport and logistics, Chan’s stance marked a shift from her predecessor.

Lam unveiled a proposal in July calling for stiffer penalties against those offering illegal ride-hailing services while strengthening the taxi trade through a plan to launch premium cab fleets.

“Residents are willing to pay more to buy the convenience and service offered by the ‘point-to-point service’, so residents’ travel needs must be our primary concern,” Chan recently said on a radio programme.

“I will definitely be very careful and will take the initiative to listen to more opinions from different industries and the public. I hope we can achieve changes through a proactive approach.”

Chan said the government would share its proposals to regulate the ride-hailing industry with the Legislative Council next year.

She said ride-hailing services were popular among Hongkongers and that “services in mainland China have grown fast and thrived and are very considerate”.

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“This makes us feel we cannot ignore [ride-hailing services]. We cannot stop here,” she said, noting that mainland operators like Didi Chuxing and Amap also wanted to break into the Hong Kong market. Amap is owned by Alibaba, which also owns the South China Morning Post.

Transport sector lawmaker Gary Zhang Xinyu said he was impressed by the transport minister’s approach to prioritising passengers’ needs. “Hong Kong residents are not asking for balance on this issue, but for a direction on how to regulate ride-hailing. Chan’s remarks reflect that she has the right attitude,” Zhang said.

In a separate interview with the SCMP, he said that the growing number of ride-hailing operators meant the government should speed up its legalisation efforts.

He suggested that a new permit be issued to allow drivers to work for ride-hailing platforms while differentiating them from those with hire-car permits or taxi drivers. These permits could include limits on income, caps on working hours or even higher fees.

Chau Kwok-keung, chairman of the Hong Kong Taxi and Public Light Bus Association, doubted the government could cater to all passengers.

“Residents’ needs are varied. Will the government be able to cater to all their different needs?” he said.

He called on the government to let all taxis ply their services on online platforms and require that the same rules apply to every operator.

Staff writer

1. Based on Issue, which of the following statements is true?

(1) Chan’s proposal is very similar to her predecessor’s.
(2) Ride-hailing services from the mainland are hoping to operate in Hong Kong.
(3) Zhang is in favour of Chan’s plans to regulate ride-hailing.
(4) Research has found that Hong Kong residents prefer taxis to ride-hailing services.

A. (1), (3) only
B. (2), (3) only
C. (2), (4) only
D. (1), (4) only

2. Using Issue, what is Mable Chan’s stance on ride-hailing services? How does it compare to the opinions of the previous transport minister?

3. To what extent do you agree with lawmaker Gary Zhang Xinyu’s suggestions for ride-hailing services? Explain using News and Issue.

1. What is the artist depicting with this image?

2. Using News, Issue and your own knowledge, what appeal might ride-hailing services have for passengers compared to taxis?

beta launch: the phase of development in which a product or service is released to a limited audience, allowing a business to test its service or product and receive feedback before the official launch.

supply and demand: a basic economic concept that describes how the market works. Supply is the amount of a product or service available for consumers, while demand is the amount that consumers want to buy. The level of both supply and demand dictates the price of a service or product.

hire-car permits: legal documents that authorise the rental or lease of a car to a person, business or organisation.

secretary for transport and logistics: also known as the Hong Kong transport minister, this role oversees transport and infrastructure services in Hong Kong and creates policies to improve safety and efficiency.

1. C

2. Ride-hailing services in Hong Kong are unregulated, which means Tada has more flexibility in its scheme. Tada also has a zero-commission model, which might incentivize drivers to choose it over Uber, as they can keep a larger sum of their earnings, giving the company more of a boost in Hong Kong. However, the company will not operate in the New Territories, which means it will not have access to a potential customer base.

3. Tada’s entrance into the Hong Kong market creates more competition for ride-hailing services, meaning that Uber, Uber Taxi, and taxis will lose customers and potentially, money. With Tada’s enticing zero-commission model, customers and drivers will flock to this new service. This could affect Uber as it tries to grapple with its competitors. It may also affect taxi regulations and the livelihood of taxi drivers.

1. The artist shows that, even though taxis are nearby and readily available, people are still eager to use ride-hailing services like Uber. This is represented by the man who walks through the taxi to get to his Uber ride.

2. Uber has fixed prices depending on the time of day, traffic patterns, and distance, whereas some taxis are known to overcharge during certain hours. Additionally, it is very easy to file complaints or ask for compensation through the Uber or Tada app, whereas the process is more arduous for taxis. Finally, as the world continues to rely on digital payments, people don’t carry cash as frequently, making ride-hailing services more convenient.

1. B

2. Aware that ride-hailing services are popular among Hongkongers, Chan is looking to create a framework for regulating them. She says that we cannot ignore the popularity of the services. She also said that the primary concern should be that of the Hong Kong resident. This is a different outlook from that of her predecessor, Lam Sai-hung, who proposed boosting taxi services with premium cabs and harsher penalties for illegal ride-hailing services.

3. I agree with Zhang’s suggestions. He is offering reasonable regulations for ride-hailing services like Uber and Tada, such as issuing a special permit for these drivers. This could address concerns about legality while keeping it an option for Hongkongers. (accept all reasonable answers)

1. According to Graph, flexibility is the most common reason for becoming a rideshare driver. This alludes to the fact that drivers can make their own hours and work whenever they want for however long, which is not the case if you want to be a taxi driver. Similarly, people appreciate how they can be their own boss and use their own vehicles. This all adds to the principles of convenience and flexibility. (accept all reasonable answers)

2. Uber and Tada are unregulated services and can accumulate many more drivers than taxi drivers. Uber has 216,000 registered drivers. In comparison, there are currently 46,000 taxi drivers in the city. Also, most people can easily become Uber or Tada drivers, so long as they have a car and a valid license, whereas becoming a taxi driver is more complex. Finally, Uber and Tada drivers can make their own schedules and work whenever they want, which gives them more flexibility.