“There is a demand for ride-hailing services, and we are aware that many cities have similar services,” he said. “We remain open-minded because the reality is that it is a popular trend.”

Uber has been unregulated in Hong Kong for a decade now, and earlier this week, the bureau proposed tougher regulations for ride-hailing platforms to address the issue of drivers of private cars offering to carry passengers without the necessary permits.

“In the future, if these platforms fail to meet the basic requirements and conditions, they will be out of the game. It’s as simple as that,” Lam said, indicating that platforms would need to be registered in the city for the sake of diligence checks.

“It means their vehicles must be legal and they must have proper insurance in place. These requirements are what we expect.”

Uber operates as a matching service between drivers and passengers, offering a service cabbies say amounts to unfair competition as many of these drivers do not possess hire-car permits.

In Hong Kong, vehicles offering paid services must have a hire-car permit, the number of which is capped at 1,500. Only 1,115 such permits were issued by the government by 2021, while Uber and Uber Taxi had more than 216,000 registered drivers that same year. But Uber Taxi is deemed legal because the vehicles possess the relevant permits.

There are 46,000 taxi drivers in the city, with 18,163 cabs on the road.

The Transport Department will begin a study on commuter needs later this year to decide the details of the regulatory mechanism, such as the types and number of vehicles to be allowed and licensing requirements for the platforms and drivers. The study is expected to take 12 months.

Minister Lam said there was a need to look at the market again even after the Law Reform Commission conducted a study in 2018 on a proposal to regulate ride-hailing services with innovation-friendly legislation.

Lam said there was an ongoing judicial review related to the hire-car permit, noting its outcome could potentially affect the regulatory framework.

Two men applied for a judicial review at the High Court in 2021 after their applications for hire-car permits to become Uber drivers were rejected by the transport commissioner.

In addition to Uber, other ride hailing companies in the city are Beijing-based Didi Chuxing, and Amap operated by Alibaba Group, which owns the South China Morning Post.

Singapore-based TADA on Thursday declared its planned foray into Hong Kong by offering a zero commission ride-hailing platform by the end of this year.

Lam said the imminent issuance of permits for the city’s new premium taxi fleets would serve as a game-changing model to improve services.

“As a smart city, launching ride-hailing services is why we have the taxi fleets. We all hope to have the convenience of hailing a taxi through a mobile app,” Lam said, adding the model was widely adopted in Singapore, Japan and mainland China.

Premium taxi fleets will be subject to more requirements than regular cabs, including provision of online booking channels on mobile applications and websites, e-payment options and the installation of cameras in the vehicles. The taxis must also be three years old or less when they join the fleet.

Lam said a maximum of five licences would be issued within this month, and the fleets were expected to debut by the middle of next year.