Explainer: What to know about Hong Kong taxi licences, and why their value is plummeting amid rise of Uber
The value of Hong Kong taxi licences has plummeted to a record low in recent weeks, now costing less than HK$2 million – less than a quarter of the value at their peak value.
Some taxi industry bigwigs have suggested that the government could buy back the licences to offset the losses that license holders are experiencing.
But what are taxi licences, who owns them, and how do they fit into the bigger picture of the industry's war against ride-hailing apps like Uber? HKFP explores the topic.
What is a taxi licence?
Taxi licences are synonymous with cab ownership in Hong Kong, as all taxi owners must possess a licence. They began to be issued by the government via public tender in 1964, during the British colonial era, and are now bought and sold freely on the market.
There are a total of 18,163 taxi licences in the city, of which 15,250 are for urban taxis, 2,838 for New Territories taxis, and 75 for Lantau taxis.
The number of licences for urban and New Territories taxis has been stagnant since 1994, the last time there was a public tender for them. In 2016, the government held a public tender for 25 Lantau taxi licences.
Licences are bought like property: a buyer pays a down payment and then takes out a bank loan, repaying it in monthly instalments over years or decades.
Take for example, cab driver Nigel Chan. He bought a taxi licence in August, he told HKFP, because he likes the flexibility of being able to drive whenever he wants, as opposed to renting a taxi and having to work specific hours.
In addition to a down payment of HK$1 million, Chan has to pay an almost HK$10,000 monthly instalment for 25 years.
The licences are permanent. Licence owners must pay an annual vehicle licence fee of HK$3,159 to the Transport Department.
Who owns taxi licences in Hong Kong?
Just like property and businesses, both individuals and companies can own taxi licences. As of the end of January 2024, about 59 per cent of taxi licences are held by individuals, while the rest are owned by companies.
According to 2022 figures from the Transport Department, the top three companies holding the most taxi licences are Tai Wo Motors, Hung Yat Motors, and Chung Shing Taxi. They are also among Hong Kong's largest taxi companies that lease vehicles to cabbies.
Tai Wo, Hung Yat, and Chung Shing have 603, 309, and 259 licences respectively.
Tai Wo and Chung Shing are two of the five companies that successfully bid for the government's taxi fleet licences to launch a line of premium cabs.
How are taxi licences a form of investment?
Taxi licences are considered an investment tool. Cab companies that sell these licences tout the fixed number of licences, saying investors need not worry about an increase in taxis eroding investment value.
Taxi licence holders can earn a monthly income by renting their vehicles to drivers. Licence owners can either find drivers themselves or pay agents or taxi firms to help lease their vehicles.
How has the value of taxi licences changed over the years?
The value of urban taxi licences – the most expensive of the three types – was HK$6.7 million at the start of 2015, according to a Legislative Council paper.
But the value of urban taxi licences has plunged by as much as 57 per cent over the past 10 years, falling to HK$2.85 million at the end of 2024.
The market price has continued plummeting this year, with an especially steep fall in May. The value reached HK$1.97 million this week.
What's the reason for the nosedive?
The fall in the value of taxi licences is largely attributed to the rising popularity of ride-hailing apps such as Uber, which arrived in Hong Kong in 2014.
Ride-hailing apps operate in a grey area in the city, which requires vehicles offering rides to have a hire car permit. However, while drivers have been arrested, police have not conducted any major crackdowns. Drivers and customers have few issues offering or using ride-hailing services.
Benson Hung, a lecturer at the Vocational Training Council who has researched the cab industry, said taxi licences were once seen as a good investment. Before Uber and other ride-hailing apps entered Hong Kong, the competition was only among cabbies, whose number was limited by the cap on taxi licences.
'There was a scarcity of resources. There was a limited supply of [point-to-point] drivers, so the value increased,' he told HKFP in Cantonese.
While some taxi drivers are not opposed to ride-hailing apps, saying they provide an extra income stream as apps like Uber also allow customers to call taxis, it is taxi owners who paid millions for their licences that have the most to lose, Hung said.
Increasingly, taxi licence holders might see reduced monthly returns because some taxi drivers may stop renting taxis, seeing their jobs as no longer lucrative. This would make taxi licence ownership less attractive, he explained.
How has the taxi trade responded to the popularity of ride-hailing apps?
The taxi trade has long urged the government to crack down on ride-hailing vehicles, calling them a threat to the industry.
Chow Kwok-keung, chairperson of the Hong Kong Taxi and Public Light Bus Association, which represents taxi owners' interests, said in May that over 75 per cent of taxi owners had fallen into debt due to the impact of ride-hailing services.
The government said in July that it would regulate ride-hailing platforms, for example, by introducing a new licensing system, and would announce legislative proposals within this year. However, no progress has been publicised.
Amid the falling value of licences, industry bigwigs have suggested the government buy back licences.
Cheng Hak-wo, chairperson of the Taxi Dealers and Owners Association and founder of Chung Shing Taxi, said in June that the government was partly responsible for the plunging value because it had turned a blind eye to ride-hailing apps.
Therefore, authorities have the responsibility to protect licence holders, he argued.
Lawmakers, however, have not lobbied behind the suggestion. Legislator Doreen Kong told HKFP that it depended on the 'economic environment' and whether the government had the ability to do so.
'I think the issue of taxis and ride-hailing apps needs to be looked at as a whole,' she said. 'When the government releases the framework [for regulating ride-hailing apps], then I can comment more.'
In response to a reporter's question, Chief Executive John Lee said on June 10 that any decision relating to the use of public funds must be made with caution.
He added that the framework the government was working on to regulate ride-hailing apps would also support the development of the taxi trade and raise the standards of taxi service.
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HKFP
7 hours ago
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Explainer: What to know about Hong Kong taxi licences, and why their value is plummeting amid rise of Uber
The value of Hong Kong taxi licences has plummeted to a record low in recent weeks, now costing less than HK$2 million – less than a quarter of the value at their peak value. Some taxi industry bigwigs have suggested that the government could buy back the licences to offset the losses that license holders are experiencing. But what are taxi licences, who owns them, and how do they fit into the bigger picture of the industry's war against ride-hailing apps like Uber? HKFP explores the topic. What is a taxi licence? Taxi licences are synonymous with cab ownership in Hong Kong, as all taxi owners must possess a licence. They began to be issued by the government via public tender in 1964, during the British colonial era, and are now bought and sold freely on the market. There are a total of 18,163 taxi licences in the city, of which 15,250 are for urban taxis, 2,838 for New Territories taxis, and 75 for Lantau taxis. The number of licences for urban and New Territories taxis has been stagnant since 1994, the last time there was a public tender for them. In 2016, the government held a public tender for 25 Lantau taxi licences. Licences are bought like property: a buyer pays a down payment and then takes out a bank loan, repaying it in monthly instalments over years or decades. Take for example, cab driver Nigel Chan. He bought a taxi licence in August, he told HKFP, because he likes the flexibility of being able to drive whenever he wants, as opposed to renting a taxi and having to work specific hours. In addition to a down payment of HK$1 million, Chan has to pay an almost HK$10,000 monthly instalment for 25 years. The licences are permanent. Licence owners must pay an annual vehicle licence fee of HK$3,159 to the Transport Department. Who owns taxi licences in Hong Kong? Just like property and businesses, both individuals and companies can own taxi licences. As of the end of January 2024, about 59 per cent of taxi licences are held by individuals, while the rest are owned by companies. According to 2022 figures from the Transport Department, the top three companies holding the most taxi licences are Tai Wo Motors, Hung Yat Motors, and Chung Shing Taxi. They are also among Hong Kong's largest taxi companies that lease vehicles to cabbies. Tai Wo, Hung Yat, and Chung Shing have 603, 309, and 259 licences respectively. Tai Wo and Chung Shing are two of the five companies that successfully bid for the government's taxi fleet licences to launch a line of premium cabs. How are taxi licences a form of investment? Taxi licences are considered an investment tool. Cab companies that sell these licences tout the fixed number of licences, saying investors need not worry about an increase in taxis eroding investment value. Taxi licence holders can earn a monthly income by renting their vehicles to drivers. Licence owners can either find drivers themselves or pay agents or taxi firms to help lease their vehicles. How has the value of taxi licences changed over the years? The value of urban taxi licences – the most expensive of the three types – was HK$6.7 million at the start of 2015, according to a Legislative Council paper. But the value of urban taxi licences has plunged by as much as 57 per cent over the past 10 years, falling to HK$2.85 million at the end of 2024. The market price has continued plummeting this year, with an especially steep fall in May. The value reached HK$1.97 million this week. What's the reason for the nosedive? The fall in the value of taxi licences is largely attributed to the rising popularity of ride-hailing apps such as Uber, which arrived in Hong Kong in 2014. Ride-hailing apps operate in a grey area in the city, which requires vehicles offering rides to have a hire car permit. However, while drivers have been arrested, police have not conducted any major crackdowns. Drivers and customers have few issues offering or using ride-hailing services. Benson Hung, a lecturer at the Vocational Training Council who has researched the cab industry, said taxi licences were once seen as a good investment. Before Uber and other ride-hailing apps entered Hong Kong, the competition was only among cabbies, whose number was limited by the cap on taxi licences. 'There was a scarcity of resources. There was a limited supply of [point-to-point] drivers, so the value increased,' he told HKFP in Cantonese. While some taxi drivers are not opposed to ride-hailing apps, saying they provide an extra income stream as apps like Uber also allow customers to call taxis, it is taxi owners who paid millions for their licences that have the most to lose, Hung said. Increasingly, taxi licence holders might see reduced monthly returns because some taxi drivers may stop renting taxis, seeing their jobs as no longer lucrative. This would make taxi licence ownership less attractive, he explained. How has the taxi trade responded to the popularity of ride-hailing apps? The taxi trade has long urged the government to crack down on ride-hailing vehicles, calling them a threat to the industry. Chow Kwok-keung, chairperson of the Hong Kong Taxi and Public Light Bus Association, which represents taxi owners' interests, said in May that over 75 per cent of taxi owners had fallen into debt due to the impact of ride-hailing services. The government said in July that it would regulate ride-hailing platforms, for example, by introducing a new licensing system, and would announce legislative proposals within this year. However, no progress has been publicised. Amid the falling value of licences, industry bigwigs have suggested the government buy back licences. Cheng Hak-wo, chairperson of the Taxi Dealers and Owners Association and founder of Chung Shing Taxi, said in June that the government was partly responsible for the plunging value because it had turned a blind eye to ride-hailing apps. Therefore, authorities have the responsibility to protect licence holders, he argued. Lawmakers, however, have not lobbied behind the suggestion. Legislator Doreen Kong told HKFP that it depended on the 'economic environment' and whether the government had the ability to do so. 'I think the issue of taxis and ride-hailing apps needs to be looked at as a whole,' she said. 'When the government releases the framework [for regulating ride-hailing apps], then I can comment more.' In response to a reporter's question, Chief Executive John Lee said on June 10 that any decision relating to the use of public funds must be made with caution. He added that the framework the government was working on to regulate ride-hailing apps would also support the development of the taxi trade and raise the standards of taxi service.
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'As President Trump has directed,' Bessent said, 'we are going to keep the US dollar the dominant reserve currency in the world, and we will use stablecoins to do that.' Of course, the US is having enough trouble with 'fiat' money. A 'lackluster' auction of US Treasury securities fueled worries about disappearing demand while the supply of new debt increases. This came amid Moody's Investors Service's downgrading of the US's AAA credit rating as national debt heads toward $37 trillion. Ray Dalio, founder of Bridgewater Associates, says Washington's fiscal trajectory is a bigger-than-acknowledged. Mark Haefele, chief investment officer at UBS Global Wealth Management, says that 'while the selling of US Treasuries in the immediate aftermath of the Moody's downgrade was relatively modest, Treasury yields have climbed steadily since the end of April as budget negotiations have come to the fore.' Could stablecoins help address the problem? In a May 2025 study, Sang Rae Kim, economist at Kyung Hee University, looked at how reserve-backed stablecoins affect the Treasury markets and credit intermediation. Kim found that large stablecoin 'issuance events induce statistically significant increases in Treasury prices.' Yet as Chan's team plans for the future, current economic dislocations are creating challenges. Not least of which is being caught between a brawling US and China. Even so, it's worth remembering that Hong Kong's currency peg is the ultimate 'widow maker' trade. For more than two decades, hedge fund managers, George Soros most famously, have tested the HKMA. The peg endured years later, even as speculative investors like Kyle Bass, founder of Hayman Capital Management, and Bill Ackman, chairman of hedge fund Pershing Square Capital Management, bet against it. Through assertive market intervention and fancy footwork, the HKMA has preserved the roughly 7.8 exchange rate established in 1983. For generations, Hong Kong's iron-clad link to the world's reserve currency served the economy well. Stability affords investment banks, exporters and entrepreneurs confidence to headquarter Asian operations in the city. It has long been touted as Hong Kong's secret weapon. The most famous such assault came in 1997 and 1998 from Soros, who 'broke' the British pound. After attacking the Malaysian ringgit and Thai baht, Soros targeted Hong Kong's peg and stocks. He lost. The HKMA overwhelmed Soros and his acolytes with a $15 billion show of force. In targeting Hong Kong in recent years, hedge fund players like Bass tested Chinese leader Xi Jinping's mettle. One big worry is control. Hence, economist Zhou Luohua of Renmin University of China calls the peg the economy's 'Achilles' heel.' 'If property and stock prices start to fall, the Hong Kong Monetary Authority can't provide sufficient liquidity like the Federal Reserve or other central banks as its money supply capacity is determined by the size of its US dollar reserves,' Zhou explains. 'If asset prices are plunging, it would trigger an exodus of funds at the same time, translating into a 'double hit' for the Hong Kong economy.' In April 2018, former HKMA head Joseph Yam argued it's time to scrap the peg so that Hong Kong can protect itself in times of turmoil. As China reduces capital controls, Yam worried 'small' Hong Kong risks getting swamped by 'huge' mainland money flows. There are some options, of course. The most obvious: soften the peg by establishing a Singapore-style basket of currencies. If the HKMA has greater flexibility, it could more easily vanquish the Soros's and Bass's of the world as well as property hoarders. Maintaining the status quo, Yam cautions, means even less affordable housing. It also makes Hong Kong more of an arbitrage vehicle between US and Chinese investors than a place that shares its fruits with middle-class households. Still, odds are that the peg is not going anywhere anytime soon. The protests in recent years challenging China's influence came as Trump's tariffs – both from 2017 to 2021 and now – throw Xi's economy off balance. China might decide that now isn't the time for experimentation with the dollar peg. Yet there is experimentation in the digital asset space that could render these 'old economy' concerns moot. And help Hong Kong get its financial groove back in short order. Follow William Pesek on X at @WilliamPesek
