Taxi business model is way off color

Taxi fares have been increased twice in the past eight years, the last time in July 2022.

In contrast, the government is rather responsive this time to another request from the trade to raise fares.

On Friday, lawmakers will discuss a government submission detailing the trade's demand for fares to be increased by up to 17 percent, which is fairly high.

In dollar terms, this would mean a new flag-fall fare of HK$32 for urban taxis - or red cabs - and a standard flag-fall fare of HK$28 for both New Territories and Lantau taxis, better known as the green and blue cabs.

Different colors are still used to identify the various operative regions. It seems unimaginable that such color codes are still in use when the compact city is already connected by different kinds of modern public transportation.

Yes, there are historical reasons - and, besides taxis, mini-buses are also differentiated by color.

These systems were introduced ages ago when public transport was limited but now people have plenty of choices.

That the numbers of both taxis and mini-buses have been capped shows that policy makers may also be of the view that these old forms of transportation may no longer suit the needs of a modern city without reform.

It's like newspaper vendors who were once indispensable - there are now only several hundred of them left as readers continue to turn to the digital sphere for information.

And it makes little sense to exempt taxis from the process of natural selection.

The taxi trade is asking for a steep fare rise as more workers in Central queue outside shops offering "two-dish-rice" lunch boxes. How many of these workers would consider hailing a cab rather than getting into a crowded MTR compartment after work?

In the midst of the current state of the economy, employees are working hard to prepare for headwinds. Taxi? They've become something of a luxury these days.

Due to an urgent need, I recently tried to hail a cab but had to wait for 30 minutes before one was kind enough to stop. The man behind the wheel was grumpy- perhaps he did not have a good sleep the night before.

Many taxis sped past, either with the flag lowered with no passenger or with the taxi sign light switched off. It looked to me that their business could not be better, otherwise why would so many ignore me?

Then I was told a story. Although thousands of licenses have been issued, only a fraction of taxis are actually on the road these days with the rest hibernating in carparks. Maybe it was because of this that I found it difficult to hire one.

Taxi owners naturally would like to see a rebound in license prices that, according to the Sintat Motors Management website, currently are HK$3.24 million for a red cab and HK$2.61 million for a green one, which is more than half from their peak.

If the application for fare increases is approved, owners will be able to raise the rent to drivers to provide some support to the license price.

But can this solve the woes facing the trade? The genuine problem with the taxi trade is not competition from Uber - its business mode urgently needs to be modernized.