Hong Kong’s taxi trade has warned that 10 per cent of the cab owners in the city could soon default on vehicle mortgages as licence values plunge, with many drivers switching to the new ride-hailing regime where 10,000 permits will be issued.
The market value of a taxi licence has plunged over the past two decades, from a historic high of HK$7.66 million (US$970,163) in 2009 to HK$2.62 million for urban or red cabs and HK$1.45 million for green or New Territories taxis as of May this year, according to the Hong Kong Taxi Exchange.
Licence values hit a record low of HK$1.99 million for red cabs and HK$1.25 million for green taxis in July last year, amid the government’s move towards introducing a regulatory regime for ride-hailing services.
Chau Kwok-keung, chairman of the Hong Kong Taxi and Public Light Bus Association, estimated about 1,800 out of the city’s 18,163 cabs would soon be repossessed by banks as owners fail to meet mortgage payments.
He sounded the warning after authorities decided to set a cap of 10,000 vehicles for ride-hailing permits on Tuesday, marking a major step in their long-running effort to establish a regulatory framework for the service.
He said that taxi licence values have depreciated greatly over the years and now that ride-hailing firms can roll out 10,000 service permits, their drivers could work a full 10 hours a day, compared with two hours in the past.
