Rising taxi costs may lead to fuel surcharges: Govt
Updated: 2013-01-23 07:08
By Fan Feifei(HK Edition)
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New Territories cab owners add their voices to call for higher fares
Secretary for Transport and Housing Anthony Cheung Bing-leung said on Tuesday the government will consider a fuel surcharge to ease the burden of rising costs on taxi owners. Cheung said the government was reluctant to pursue the surcharge some years ago because of the potential for creating confusion among passengers, but now it will study the potential impact of such a charge.
Considering the fact that both urban and New Territories taxi operators have applied for fare increases, Cheung responded that the Transport Department will study factors such as consensus in the trade, taxi operating costs, owners' and drivers' benefits and public affordability.
He said it would take a few months to process the applications because the Transport Advisory Committee and lawmakers must be consulted before a proposal is submitted to the Executive Council for endorsement.
As to the fuel surcharge, the authority will research the experience in foreign countries on fuel surcharges and the effect it would bring about, including how frequently it would be adjusted, and whether the public could afford it, added Cheung.
Billy Mak, associate professor of finance and decision science at Hong Kong Baptist University said, "There might be some difficulty if the fuel surcharge is implemented, for the fuel surcharge is always fluctuating due to the price of oil in the market. So the government needs to approve and adjust according to the related change".
He also said the government should be careful and consider the effectiveness of the taxi fuel surcharge and maintain the transparency of taxi fares.
Fourteen New Territories taxi organizations on Tuesday applied to the Transport Department for a fare increase, suggesting the fare for New Territories taxis should increase by HK$2.5, from HK$16.5 to HK$19. Fare increments on taxi meters would rise from HK$1.3 to HK$1.4 each time the meter ticks over, based on time and distance for the first 9 kilometers and then HK$1 thereafter.
Ng Kwan-sing, chairman of the Taxi Dealers & Owners Association, said most taxis and drivers organizations had reached a consensus, but four groups including some drivers' unions had different opinion or did not comment.
Ng mentioned the operating costs in the industry have been increasing recently, especially insurance rates which have increased twice in less than six months. "The insurance fee for each taxi has risen from HK$7,000 in 2009 to about HK$20,000 at present due to increased cases of insurance fraud."
He said some drivers deliberately cause traffic accidents in order to defraud insurance companies. He said he hoped the government could step up efforts to combat insurance fraud.
When asked whether the drivers would be charged higher rents by owners, Ng said the increase in taxi fares is not necessarily related to rental rates. It will depend on the business situation of drivers, and rent increases will be considered after the increased fares are implemented.
Thirty taxis owners and drivers organizations met with the Transport Department on Monday requesting an increase in the urban flag fare from HK$20 to HK$22.
fanfeifei@chinadailyhk.com
(HK Edition 01/23/2013 page1)