No way should Hong Kong bail out taxi licence holders
What do you get when you mix outdated regulation, asset bubbles and an on-demand economy? In Hong Kong's case, a taxi system on life support – clinging to the hope of million-dollar medallions (taxi licences) while app-based ride-hailing services quietly reshape the market.
The government has finally
committed to regulating these ride-hailing platforms, promising a legal framework within the year. It has also launched a
premium taxi fleet scheme , granting permission for a handful of operators to modernise and professionalise the industry. These are welcome steps.
But looming over the debate is a question no official wants to face head-on: what should Hong Kong do about its
taxi licences – some of which were sold for more than HK$7 million (US$891,800) but are worth much less now?
Unsurprisingly, some licence holders are calling for a government buy-back. Proposals in the past have included rebuying taxi licences
at auction prices, but there are more ambitious demands, and one estimate puts the cost of buying back all 18,000 licences at tens of billions of Hong Kong dollars. One recent proposal is for the government to repurchase the licences at HK$5 million each, despite market resale prices having fallen below HK$2 million.
The answer? Absolutely not.
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