By Brian Wong
A Hong Kong court has quashed a government decision to refuse hire car permits to two prospective Uber drivers seven years ago, rejecting authorities鈥 contentions that the move could open the floodgates for ride-hailing services and private vehicles to operate as 鈥減seudo-taxis鈥.
In a written judgment handed down on Thursday, the High Court found the Commissioner for Transport鈥檚 dismissal of two litigants鈥 requests for a permit in 2018 to be based on an 鈥渋mpracticable, illogical and unworkable鈥 interpretation of the legal requirement that would likely render all first-time applications unsuccessful.
The court also dismissed the government鈥檚 argument that the legislature had only intended for taxis to provide personalised point-to-point journeys, ruling that it would effectively impose a categorical ban on ride-hailing operators and run contrary to authorities鈥 clear assurance that they would not be excluded from providing point-to-point services.
Mr Justice Russell Coleman ordered the Transport Tribunal to consider the matter afresh, but noted his ruling 鈥渨ould be practically determinative鈥 of the applications for a permit in the applicants鈥 favour.
He stressed the judgment only concerned the correct interpretation of the law governing the issuance of hire car permits but not the government鈥檚 policy on e-hailing platforms.
The ruling came at a time when the government is mulling over legalising Uber and other ride-hailing services through the introduction of a regulatory framework amid popular demand and complaints against poor taxi services.
The litigants, Chen Hai-tao and Yin Wai-ho, jointly lodged a judicial review after failing to obtain a hire car permit that would have enabled them to legally work as Uber drivers using their Tesla Model S electric cars.
It is currently illegal for drivers of private vehicles to accept paid customers without such a permit, with many ride-hailing platforms such as Uber, Tada, Amap and Didi Chuxing operating unregulated.
Amap is operated by Alibaba Group Holding, which owns the South China Morning Post.
The government said it did not have a policy of restricting e-hailing car services, but operators must work legally under the permit scheme. The number of permits has been capped at 1,500 since 1981. The government had issued 1,067 such permits as of the end of 2020.
In August 2021, the tribunal upheld the transport commissioner鈥檚 decision to reject the two applicants鈥 appeals, saying there was no evidence of greater demand for the pair鈥檚 specific services despite an increasing demand for personalised point-to-point transport in Hong Kong.
At issue in Chen and Yin鈥檚 case was whether 鈥渢he type of hire car service specified in the application is reasonably required鈥, a test which forms one of the two main requirements for issuing the permits under the Road Traffic (Public Service Vehicles) Regulations.
Counsel for the commissioner argued that the applicants, in order for their services to be considered 鈥渞easonably required鈥, had to show they were able to cater for 鈥渟pecial market niches鈥 that set them apart from existing taxi services.
But Coleman said it would be 鈥渃lose to absurd鈥 to suggest the litigants had to prove the uniqueness of the driving experiences they intended to offer before they could secure permissions to operate.
鈥淣ot only is this likely impossible in the context of any first-time applicant for a [hire car permit], but it is also impracticable, illogical and unworkable to graft on some requirement for a 鈥渦nique鈥 or 鈥渘iche鈥 service to be provided 鈥榮pecifically鈥 by that applicant,鈥 the judge wrote.
Coleman also found no basis to support the commissioner鈥檚 contention that allowing private cars to provide personalised point-to-point services would turn them into 鈥減seudo-taxis鈥, saying ride-hailing services had to be pre-booked and did not involve any plying for hire as taxis did.