New legal regime regulating taxi services

Introduction
Legal framework
Key changes
Missed opportunity
Comment

Introduction

The government's newly proposed draft law concerns the improvement and quality assurance of Macau's taxi services.

According to public opinion, taxi services are neither fulfilling customers' needs nor responding to the high demand caused by increasing numbers of tourists each year. As the existing legal regime governing this sector has been in force for more than 18 years, reforms are long overdue.

However, the new draft law has failed to satisfy public expectations as it provides no space for the use of app-based ride-hailing services.

Essentially, the new legal regime:

• adjusts the terms of licence and permit acquisitions;
• broadens government oversight; and
• increases the effectiveness of penalties for rule violations.

Legal framework

On 19 April 2018 the Legislative Assembly generally approved the new legal regime on taxi passenger transport.

This latest draft law proposes to reformulate the legal framework applied to taxis and repeal Decree-Law 62/87/M of 21 September 2018, as well as Orders 214/98/M and 366/99/M. It focuses on establishing a regime of access, management, supervision and penalties for taxis (as defined in Article 1 of the draft law).

Key changes

The draft law prohibits individuals from applying for a licence; instead, licences would be available only for corporations. This cutback was a result of the proper internal management system and quality supervision of drivers which, according to the proposal, only legal persons are capable of fulfilling. Further, corporations would be expected to arrange technical training for their operators.

Under the new regime, the government seeks to impose tighter controls on the sector and implement administrative measures (eg, licence or permit suspensions) whenever serious infractions occur. Therefore, where drivers commit four administrative infractions (eg, refusing to drive a client or negotiating the price of a ride) within five years, they could have their driver identification card cancelled. Further, the police would be empowered to investigate and impose fines and other administrative measures when infractions occur in plain sight.

Innovatively, the draft law proposed introducing a mandatory satellite recording device to register conversations between drivers and their clients in order to obtain evidence if a dispute occurs; however, the specialised committee rejected this measure.

As a deterrent, the draft law redefined and strengthened the penalties for rule violations. For example, under the new regime, illegal taxis would face penalties of MPtc90,000 as opposed to MPtc30,000 under the existing regime. Further, charging different tariffs for the same journey would incur a fine of between MPtc6,000 and MPtc15,000, depending on whether the extra charge was higher than MPtc50. However, the specialised committee cut these fines by one-third and the final amounts remain undisclosed.

Missed opportunity

Unlike some of its neighbours (eg, Taiwan and Singapore), Macau has decided against regulating ride-hailing services, remaining focused on its taxi sector and ignoring public demand.

Following the suspension of Uber services on 21 July 2017, the region has few online platforms for calling taxis – an issue that even legislators challenged (albeit unsuccessfully) before the Legislative Assembly.

Arguably, the government has missed an opportunity to improve Macau's transport services. Ride-hailing companies offer high-quality services using brand new cars, which not only pollute less, but are also more comfortable for passengers. Further, such companies overcome language barriers as clients can determine their journeys directly using an app.

Surprisingly, Beijing – which is known for its stricter regulations – is already regulating ride-hailing companies such as Didi Chuxing. Further, in Portugal, a new legal regime which specifically governs rail-hailing services was recently established. Rather than incorporating new rules for such services into the general regime for passenger transport in taxis, the legislation differentiates rail hailing from carpooling and car sharing. However, this has unfortunately not encouraged the Macau government to do the same.

Comment

With the above examples in mind, it is hoped that the government will eventually heed public demand and regulate ride-hailing services. This notwithstanding, the proposed changes under the new draft law will support taxi passenger transport in Macau. While the new legislation has been generally approved in draft form, the final regime will likely reflect the proposed version.

For further information on this topic please contact Pedro Cortés or Rita Rocha at Rato, Ling, Lei & Cortés Advogados by telephone (+853 2856 2322) or email (cortes@lektou.com or rita@lektou.com). The Rato, Ling, Lei & Cortés Advogados website can be accessed at www.lektou.com.