Spark Deep Dive: New ride-hailing platform launches in Hong Kong as city considers regulations

A Singapore-based ride-hailing service provider has launched in Hong Kong ahead of a government plan to regulate operators. The newcomer is expected to provide fresh 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 said it was 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.

He added that the government will formulate legislative proposals for regulating ride-hailing platforms in 2025. They 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.

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 necessary 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 and cars it has recruited so far, but its app shows it is recruiting both private vehicles and taxis. It did not say whether the drivers have secured 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’s dynamic economy, dense population, and strong demand for transport were key factors in choosing the location to set up operations.

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

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 the news, name ONE potential advantage and ONE potential disadvantage for Tada in Hong Kong.

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

1. What is the artist depicting in this image?

2. Using the news 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.

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 incentivise 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.