Following is a question by the Hon Frankie Yick and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (April 12):

Question:

     Under the law, the Commissioner for Transport (Commissioner) may for the purpose of authorising the use of a private car for the carriage of passengers for hire or reward, issue in respect of the private car a hire car permit (permit) for providing "private hire car services", and such services include Private Service, Private Service (Limousine) and Private Service (Limousine) (Cross-boundary).  There are comments that the increasing prevalence in recent years of the use of private cars without a valid permit for the carriage of passengers for hire or reward (commonly known as "white licence cars' service"), together with the implementation of certain measures (new measures) by the Transport Department (TD) with effect from February 1 this year to facilitate new operators to operate hire car services, have brought about impacts on other public transport services.  In this connection, will the Government inform this Council:

(1) of the current number of valid permits for Private Service (Limousine) (Limousine Permits) and the criteria for the issuance of such permits by the Commissioner; whether such criteria cover the following situation: that public transport services are unable to satisfy the transport demand of the areas concerned; if so, of the specific indicators reflecting such situation;

(2) given that the new measures include: applicants may apply for Limousine Permits even if they are unable to produce hiring records for the past three months or a service contract that has been entered into with a validity period of six months, of the authorities' criteria for deciding whether the hire car services involved in those applications are required;

(3) of the age distribution of the vehicles deployed under the Limousine Permits issued; given that with effect from February 1 this year, TD has stipulated that the vehicles involved in the new applications for such type of permits must be less than seven years old, whether TD will further lower the age ceiling of such vehicles and set an age ceiling for the vehicles involved in the applications for renewal of such type of permits, with a view to ensuring that such vehicles are of a quality that befits the positioning of limousine service; if so, of the details; if not, the reasons for that;

(4) as the requirement that vehicles involved in Limousine Permit applications should have a minimum taxable value of $300,000 was set in as early as 1994 and has been in use for over 20 years, whether TD will scale up the taxable value in light of market changes, so as to ensure that such vehicles are of a quality that befits the positioning of limousine service and to avoid such service overlapping with other personalised and point-to-point public transport services (e.g. taxi service); if so, of the details; if not, the reasons for that;

(5) as some members of the public have pointed out that, even though a permit holder is required to display the permit on the left-hand side of the windscreen of the vehicle concerned, the small size of the permit has made it difficult for them to identify swiftly whether the vehicle concerned holds a valid permit, whether TD will put in place any improvement measure; if so, of the details; if not, the reasons for that;

(6) whether the authorities have put in place any measure to ensure that vehicles issued with valid permits will provide services only in designated service areas and to prevent permit holders from leasing their vehicles to others for carrying passengers for reward; if so, of the details; if not, the reasons for that; of the number of cases in which permit holders were punished for breaching the terms and conditions of the permits and the relevant penalties in the past three years; and

(7) whether TD will put in place other measures, apart from the upcoming launch of a newly developed online enquiry system, to enable members of the public to discern whether various types of hire car services are operating legally with a view to eradicating white licence cars' service; if so, of the details; if not, the reasons for that?

Reply:

President,

     According to the positioning in the transport hierarchy adopted by the Government, hire cars can provide relatively high-end personalised point-to-point services to meet the diverse transport needs of passengers.  Hire cars do not come under the category of public transport services. A private car owner must obtain a hire car permit (HCP) for operating hire services in accordance with the Road Traffic (Public Service Vehicles) Regulations (Cap. 374D) (the Regulations).  Passengers can only book the service in advance and cannot hail any hire cars in the streets.  The charges of such hire services are not subject to regulation.  

     My reply to the various parts of Hon Frankie Yick's question is as follows:

(1) and (2) As of end-March 2017, there were a total of 274 valid Private Service (Limousine) HCPs (Limousine Permits).

     According to the Regulations, the Commissioner for Transport (the Commissioner) may issue to the applicant an HCP if she is of the opinion that the type of hire car service specified in the application is reasonably required.  It is also stipulated in the Regulations that in determining whether to issue an HCP for private hire car services (including a Limousine Permit), the Commissioner may have regard to, amongst other matters: the extent to which the area from which the applicant proposes to operate the private hire car service is served by public transport, whether the applicant is able to demonstrate reasonably that the private hire car service applied for is required in that area, and whether there is a suitable place in the area concerned to park the private car for hire.  When considering the application, the Transport Department (TD) will adopt a macro and holistic approach to assess the overall demand for the transport services concerned.

     The TD has been vetting applications for HCP in accordance with the requirements of the Regulations. Hire car services must be "reasonably required".  The TD considers a host of factors, including hiring records and service contracts that have been entered into by an applicant, to evaluate if the application meets the requirement.  In recent years, the trade has been providing new and diverse hire car services (such as wedding car rental) in response to the changing needs of the market.  Nevertheless, past records or contracts may not be available before the business commence.  As such, starting from February 1, 2017, the TD will give flexible consideration to applicants for Limousine Permits who are unable to produce the required hiring records or service contracts that they have entered into.  Such applicants should provide adequate justifications and supporting information about the proposed business model to support their application for the TD's consideration.  The TD does not have a pre-set preference for any particular type of business model. It will holistically consider each application on its own merits, and stringently vet the information provided by the applicant.  All HCP applications are considered by the Contract HCPs Selection Board which comprises non-official members.  The Selection Board will recommend to the Commissioner whether to approve the application or not.  If the application is approved, the Commissioner may specify special conditions to the permit where necessary.  For example, for Limousine Permits granted specifically for hire car services for disabled persons, a restriction will be imposed such that the hire car service will be provided only to disabled persons and their carers.

(3) As at end-March 2017, there were 274 vehicles with valid Limousine Permits.  Their average age is 5.8 years, and about 60 per cent are aged six years or below.  To sustain the high quality of hire cars for limousine services, from February 1, 2017, vehicles deployed under new applications for Limousine Permits should satisfy the following new requirements on vehicle age:

(i) the vehicle should be aged six years or below from the date of first registration as a "brand new vehicle" in Hong Kong at the time of application; for a vehicle not first registered in Hong Kong as a "brand new vehicle", should be within six years from the "Year of Manufacture" at the time of application; and

(ii) if permit holders apply for replacement of vehicles under the Limousine Permits in future, the replacement vehicle should not be older than the vehicle being replaced so as to ensure that the replacement hire cars are not of lesser quality and that their quality befits the positioning of limousine hire car services.

     The requirement on replacement vehicles at (ii) above will also apply to existing permit holders from February 1, 2019.  The Government will review the above condition on vehicle age when necessary.

(4) The TD reviews from time to time the requirements on vehicles deployed under Limousine Permits. According to the latest review by the TD, on the basis of the changes in Consumer Price Index (C) (which is compiled based on the expenditure patterns of households in the relatively high expenditure ranges), a vehicle with taxable value of $300,000 in 1999 is estimated to have a taxable value of about $350,000 in 2016, representing a relatively moderate increase.  At present, a non-electric private vehicle of a taxable value of $300,000 will cost almost $500,000 inclusive of first registration tax.  Compared with other vehicles used to provide point-to-point services, such as taxis which cost about $250,000 to $300,000, private hire cars have much higher prices and are of more luxurious models.  As the substantive increase in vehicle taxable value is not substantial, and that the design and quality of private cars providing limousine services are generally better than other vehicles providing point-to-point personalised services, the TD considers that the current requirement on taxable value may be maintained with the additional requirement on vehicle age mentioned in part (3) above to ensure vehicle quality.  The TD will continue to monitor the change in vehicle price in Hong Kong and will review the above conditions where necessary.

(5) and (7) Under regulation 14(5) and Schedule 3 of the Regulations, an HCP shall be displayed on the left-hand side of the relevant private vehicle's windscreen in such a manner that it is clearly visible from the front of the vehicle for easy inspection.  Since the end of 2015, the size of an HCP has been increased by almost 10 per cent (i.e. with a size of 13 centimetres x 14cm), and the words "出租汽车许可证 Hire Car Permit" are displayed in large red print so that the public can identify legally operating hire cars easily.  A sample of the current design of an HCP is shown in Annex.

     The TD has been making various publicity efforts through various channels, including broadcasting announcements of public interest on radio, displaying samples of HCPs on the department's website, and putting up posters in public places.  These efforts serve to further educate the public that when they use hire car service, they should ensure the private car concerned is issued with a valid HCP; and about ways to identify such vehicle.  In the publicity materials, the TD has also reminded the public that the third party insurance for a private car engaging in illegal hire car service may no longer be valid.  Members of the public who intend to use hire car service should enquire with the service operator to ascertain whether an HCP has been issued in respect of the private car concerned and check the permit's validity before the journey starts.  The TD will launch an online enquiry system in mid-2017 to facilitate members of the public to find out whether individual private cars have been issued with a valid HCP.

(6) Under regulation 14(5) and Schedule 3 of the Regulations, an HCP shall be subject to such conditions as specified in the HCP and to such other conditions as the Commissioner may from time to time specify in the HCP (e.g. the vehicle can only be used for the conveyance of visitors of the designated hotel or travel agent; or that the vehicle can only serve wheelchair users).  The holder of the permit (i.e. the registered owner) or any person commissioned by him to drive the hire car to provide service shall comply with all the conditions of issue of the permit.

     Under regulation 21 of the Regulations, any person who drives or uses any private car in respect of which an HCP is issued in contravention of any condition to which the HCP is subject commits an offence and is liable to a fine of $1,000 and to imprisonment for six months.  Moreover, the Commissioner may cancel the HCP concerned according to regulation 22 of the Regulations.  If the offence is committed by any person other than the HCP holder, the HCP holder also commits an offence.  The TD conducts random inspections of the operational records of permit holders from time to time to identify cases of non-compliance.

     Upon identification of a suspected case of non-compliance, the TD will issue a letter to the applicant demanding an explanation and rectification.  If an investigation confirms that the vehicle concerned has contravened the Regulations or conditions of issue of the HCP, the TD will, subject to the circumstances of the case, issue a warning letter to the permit holder or even cancel the permit.  According to the records of the TD, the department issued letters in respect of 20 suspected cases of non-compliance between 2014 and 2016.  These cases mainly involved minor contraventions, e.g. suspected display of marks on vehicle bodies without the written approval given by the Commissioner.  Upon receipt of the TD's warning letters, the permit holders concerned immediately rectified the non-compliance, and pledged compliance with the conditions of issue in the future.

Ends/Wednesday, April 12, 2017
Issued at HKT 15:00

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