Uber has put an offer on the table for the Hong Kong government amid investor fears over Beijing’s proposed national security law – it will move its regional headquarters to the city if the ride-hailing firm is allowed to operate here legally.
Revealing the deal on Tuesday, Uber Hong Kong general manager Estyn Chung promised the move would create jobs, bring top-class talent and help create an innovation and engineering hub in the city, which has been ravaged by the Covid-19 pandemic.
He said the amount of investment and the number of jobs created would depend on the outcome of a discussion with the government.
“Uber is ready to move its regional headquarters to Hong Kong … but regulatory certainty is key. It’s time for the government to regulate ride-sharing so we can bring jobs and investment to Hong Kong,” he said.
However, Chung said the government needed to provide a regulatory framework that would allow the company to make the move possible.
“It’s simply not possible for any business to make significant investments without regulatory certainty,” he said. “We’re asking the government and community leaders to sit with us and hear our vision and investment plan for Hong Kong, so together we can find a pathway to regulate ride-sharing.”
The US-based firm laid its cards on the table as it plans to relocate its Asia-Pacific headquarters out of Singapore in the next 12 months, with the pandemic hammering its business.
But the offer comes at a time when Beijing’s proposed national security law has stoked fears of uncertainty about Hong Kong in the international business community, with many feeling the move could hamper the city’s business environment and jeopardise its role as a financial hub.
The city is already battling the double whammy of the social unrest that erupted in June last year and the ongoing pandemic.
We’re optimistic about the future of Uber in Hong Kong
Estyn Chung, general manager, Uber Hong Kong
However, Chung said the company was confident of Hong Kong’s economic future as Uber’s business in the city posted a strong rebound, achieving 70 per cent of its pre-Covid-19 figures.
“We’re watching the situation closely. It’s a bit early to speculate what may happen … But we’re optimistic about the future of Uber in Hong Kong. “
Despite operating in the city for six years, the firm’s rides have been deemed illegal for carrying passengers without a hire-car permit. It has also faced strong resistance from the local taxi industry, where there are 18,163 licensed taxis.
In 2019, a year after merging its Southeast Asia operations with regional rival Grab, Uber opened its Singapore office to oversee operations in nine Asia-Pacific markets, including Australia, India, Japan, South Korea, Taiwan and Hong Kong. At the time, the office had about 165 employees.
Uber has been calling for a partnership with the Hong Kong government to address the city’s mobility future. However, the government has so far stood firm in cracking down on the service, with proposed increases in penalties for drivers caught providing illegal rides.
The deal could create jobs and help boost Hong Kong’s economy. The government should take it
Francis Fong, honorary president, Hong Kong Information Technology Federation
Chung said the company would formally approach the government with its proposal in the next few days. “We want to make it clear that Uber is ready and willing to compromise, to find a fair and reasonable pathway forward,” he assured.
Chan Man-keung, chairman of the Association of Taxi Industry Development, said if the government really wanted to open up the ride-hailing market to allow for Uber’s participation, it needed to resolve the long-standing issue of taxi licences currently priced at more than HK$5 million (US$645,000) each.
“The government needs to be fair to taxi owners. They all invested a substantial sum of money to get their licence. The government could buy back all our licences and then it can reform the market as it pleases,” he said.
“If the government doesn’t compensate for our losses, we’ll definitely oppose any deal with Uber,” he insisted.
Chan said the taxi industry might also consider any counter proposal to offset their income loss, such as government subsidies for taxi owners and drivers. “But the subsidies have to be substantial so they could safeguard the taxi stakeholders’ basic profits,” he said.
Francis Fong Po-kiu, honorary president of the Hong Kong Information Technology Federation, said the government should allow Uber’s legal operations in Hong Kong by relaxing regulations.
“The deal could create jobs and help boost Hong Kong’s economy. The government should take it. But it should also find ways to balance the interests of the taxi sector, such as providing some form of subsidies to offset their loss of earnings,” he said.
A spokeswoman for the Transport and Housing Bureau said the department noticed Uber’s proposed move but insisted that it was illegal to carry paying passengers without a hire-car permit.
“To meet new demands in the community for personalised point-to-point public transport services of higher quality, the government has introduced the franchised taxi services bill to the Legislative Council. The government will continue to listen to views from the public,” she said.
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This article Uber offers to move Asia-Pacific headquarters to Hong Kong if city legalises service first appeared on South China Morning Post