“Resolving the problems of traffic safety of and insurance premium increases for taxis”
Chan Chun-ying:
President, the taxi service in Hong Kong is one of the major modes of road transport in the city, with a history of more than one hundred years. There are currently more than 18 100 taxis, with an average daily patronage of nearly one million. The taxi service is closely linked to the daily life of the public. The series of problems related to the safety of taxi traffic have aroused the concern of the public, the insurance sector and other motor vehicle users. At present, there are more than 60 insurance companies offering motor vehicle insurance in Hong Kong, but relatively few are willing to provide taxi insurance. As a number of Members have just mentioned, the accident rate for taxis is nearly 25%, which is 10 times higher than for private cars, and the amount of compensation is also very high. Despite the fact that taxi insurance premiums have increased year on year in recent years, the taxi insurance industry has recorded a loss in 11 of the past 16 years.
Last year, Target Insurance Company, Limited (“Target Insurance”), the leading taxi insurance company with a market share of 60%, announced that it would refuse to underwrite new taxi policies, forcing the Insurance Authority (“IA”) to take control of Target Insurance in order to maintain market stability and protect the interests of policyholders. It has been learnt that the insurance premiums and insurance excesses of the taxi insurance policies affected by Target Insurance have continued to soar. In particular, taxis involved in traffic accidents often have to pay insurance premiums of $40,000 to $50,000 or even $60,000 to $70,000. Insurance excesses have also increased from $20,000 to $50,000. Even the less accident-prone taxis, commonly referred to as “safety prize” taxis, have seen their insurance premiums rise from over $20,000 to over $30,000, an increase of 50%. Following the taxi fare increases approved by the Chief Executive in Council last year, the taxi industry has applied for a further fare increase this year. I believe that the significant increase in insurance premiums is one of the main reasons for the continued increase in taxi fares.
I am very grateful to Mr CHAN Kin-por for proposing a motion to encourage the phasing out of old taxis in poor condition and the gradual installation of driver assistance devices and other measures to reduce the risk of accidents, in order to address the problems of traffic safety and the increase in insurance premiums for taxis, and in the hope of curbing the upward trend of taxi insurance premiums at the source.
As far as I know, Hong Kong does not currently have any regulations on the service life of taxis, but the older the vehicle, the higher the risk of traffic accidents and the higher the insurance premiums for taxis. In contrast, although the development of taxis on the Mainland is not very long, most Mainland cities have already replaced their taxis for several generations. In addition, there are relevant laws in the Mainland that set an eight-year service life limit for small and micro-taxi passenger vehicles, and mandatory scrapping is implemented for motor vehicles that meet the scrapping criteria based on their use, safety and emission inspection status. Therefore, from the perspective of traffic safety and reducing insurance costs, the Government should consider setting a service life limit for Hong Kong taxis to reduce the likelihood of traffic accidents and curb the continuous increase in taxi insurance premiums every year.
At present, many countries and regions are also using various sensor technologies installed in automobiles to continuously sense the surrounding environment, collect data, detect and track in the driving process, and perform system analysis by combining navigation map data. This allows the driver to be alerted to potential hazards in advance, effectively increasing driving comfort and safety. For example, the European Union (“EU”) requires all new vehicles to be equipped with driver fatigue warning, automatic speed limitation and other support systems. The relevant acts have officially come into force in all EU regions, and all vehicle manufacturers will be required to equip their vehicles for sale after 2024 with relevant safety equipment. Meanwhile, 28 states in the United States have also enacted legislation on advanced driver assistance systems for passenger cars.
In contrast, there is currently no such requirement in Hong Kong. With reference to the development of driver assistance devices in a number of countries and regions, the Government should consider providing some financial incentives, as recommended by Mr CHAN Kin-por and other Members, to encourage taxis to be fully equipped with driver assistance devices and dash cams connected to the cloud. In addition to recording driving conditions, monitoring drivers’ mental state and driving behaviour to determine liability in accidents, this can also prevent insurance fraud. In the long run, this can improve the overall safety standards of the taxi trade and reduce the number of traffic accidents involving taxis.
President, I support the original motion and the amendments by Ir CHAN Siu-hung and Mr CHAN Han-pan, but I have some reservations about some of the proposals in Mr Frankie YICK’s amendment.
I so submit.