The company will work with taxi fleets to offer “3,000 to 4,000 vehicles” on its platform for a start. - TADA
HONG KONG: Singapore’s ride-hailing platform Tada will expand into Hong Kong come November, working with taxi fleets for a start, as it seeks to gain a foothold in a market where Uber has positioned itself as the main alternative to the city’s notoriously poor cab services.
The move comes as the government plans to regulate private car-hailing services, which remain largely illegal, unlike in other parts of Asia such as Singapore and mainland China.
“Our target is to launch in Hong Kong by the end of November,” Tada’s chief executive officer Sean Kim told The Straits Times in an interview on July 15.
The company will work with taxi fleets to offer “3,000 to 4,000 vehicles” on its platform for a start.
“Singapore and Hong Kong share many similarities, which allows us to bring what we’ve learnt from our success in Singapore over to Hong Kong,” Kim said.
“Like Singapore, Hong Kong has a diverse community with very tech-friendly users and very well-established public transport systems, including the taxi industry... But in Hong Kong, there is a gap in terms of embracing new changes – not necessarily technical ones, but in adapting to users’ needs and demands.”
Tada sees itself offering users “more options” as it plays the role of a “matchmaker” to connect demand and supply of ride-hailing services in the city, the CEO said, adding that it is also eyeing South Korea for further expansion.
In Hong Kong, it is illegal for drivers to provide paid rides without a taxi licence or a car-hire permit. First-time offenders face fines of up to HK$10,000 (S$1,700).
Ride-hailing apps like US-based Uber operate in a legal grey area, providing services using taxis as well as private cars. The latter are not necessarily licensed to offer paid rides.
Six-year-old Tada is up against stiff competition in Hong Kong. Besides Uber, it has to fight for market share with about a dozen other cab-hailing apps, including China-based Didi Chuxing and Amap.
Kim believes Tada’s zero-commission model – which charges a small, fixed platform fee per ride – will appeal to drivers as it allows them to keep more of their earnings. Overall, this will result in better service, he said.
Uber charges its drivers around 15 per cent to 35 per cent commission per ride, cabbies told ST.
Tada’s fee for drivers in Hong Kong will be determined closer to its launch, Tada’s regional general manager Jonathan Chua said.
In Singapore, Tada charges drivers a platform fee of 60 cents for fares between $7 and $18, and 80 cents for fares above $18. The fee is waived for fares below $7.
This means drivers pay at most 8.6 per cent of their earnings per ride, and get to keep a larger proportion of their takings from longer-distance rides.
Tada also hopes to cater to Hong Kong’s unique and consistent demand for larger vehicles to ferry bigger groups, such as families with multiple children or helpers, Chua said.
Taxi driver Wallace Lai, who is on the Uber platform, is looking forward to Tada’s arrival. He said he will definitely sign up if it takes a smaller cut of his earnings.
The 29-year-old, who uses three ride-hailing apps, said six or seven in every 10 rides he provides are via Uber, which collects a 25 per cent to 35 per cent cut from him per ride.
“Hong Kongers now prefer to book their taxis through Uber because of the better service” compared with street-hailing or via other apps, he said.
“Uber has a very strong system for ratings and complaints. For drivers, poor ratings mean fewer passengers; skipping too many bookings could even get you banned. So, of course, the service is better if you booked your taxi through the app.”
Another cabby, who wanted to be known only as Michael for privacy reasons, said he gave up using Uber mainly because of the high commission.
Tada’s zero-commission model might be more favourable to drivers, said Michael, 22. Currently, around 20 per cent of his income is earned via ride-hailing apps.
“But the Hong Kong market is already crowded with ride-hailing platforms... Tada will face a difficult start if it fails to pull enough passengers from those platforms to its own.”
Tada CEO Kim, when asked if it would offer private car-hailing services in Hong Kong as well, said the firm “would not exclude the possibility of working with private cars... but only at a later stage” as it monitors the government’s decisions on regulating the ride-hailing market.
Uber boasts a database of more than 216,000 drivers in a city with 46,000 taxi drivers, 18,000 taxi licences and 1,500 car-hire permits.
The authorities in July promised to regulate ride-hailing services and potentially require licensing for platforms like Uber, but they need a year to propose a well-researched regulatory framework.
In the meantime, the government said it would roll out a new “premium taxi” scheme by the end of 2024. This is aimed at improving taxi services by requiring operators to offer online booking and payment options, closed-circuit television systems, and vehicles less than three years old.
On July 14, it raised all taxis’ flag-fall charges by HK$2, taking it to HK$29 for urban cabs, HK$25.50 for those in the New Territories, and HK$24 for those in Lantau.
The government has left Uber unregulated for a decade, breeding resentment among taxi drivers and taxi licence owners who say the platform has affected their livelihoods and investments.
Taxi drivers, who pay between HK$350 and HK$450 a day in cab rental, blame the popularity of Uber’s private car services for diluting their earnings.
Taxi licence owners, meanwhile, blame the platform for devaluing their costly licences, which have fallen from a peak of HK$7.66 million per licence in 2013 to HK$2.8 million currently.
Lawmaker Doreen Kong, who had previously urged the government to buy back all taxi licences and start a new system to grant car-hire permits to taxis and ride-hailing vehicles alike, welcomes Tada’s impending entry into Hong Kong.
“The use of ride-hailing platforms is a global trend and should be the direction and an important pillar of a smart city,” Kong told ST.
“The government may need at least another year or two to settle the issue (of a regulatory framework), which, to me, is a bit too late... The government should review if it is time for them to phase out taxi licences and adopt another system instead... that can be sustainable for the next 20 to 30 years.”
Alex Liu, managing partner of law firm Boase Cohen & Collins and a panel chairman of the transport tribunal, said the entry of more ride-hailing operators like Tada was “inevitable”, given high public demand for such services.
“It is important not to frame it as a ‘taxi vs ride-hailing’ issue, but as a commitment to providing the best possible transport services to the public in a way that benefits all sides,” Liu said.
Founded in 2018 and headquartered in Singapore, Tada is one of five ride-hailing platforms licensed in the city-state.
The company, which reported positive earnings before interest, taxes, depreciation and amortisation for 2023, also operates in Cambodia and Thailand.
South Korea is “on the list” of Tada’s potential destinations for further expansion, its CEO revealed.
The company is already “talking to multiple stakeholders in South Korea, including the authorities and all the industry players”, Kim added.
South Korea already has a ride-hailing app of the same name, Tada. But the two are separate firms with different parent companies, and have no relation to each other. - The Straits Times/ANN
