Hong Kong's government seeks to regulate online car-hailing platforms, a move likely to affect Uber

The Hong Kong government is seeking to regulate online car-hailing platforms through licensing and impose tougher penalties on illegal ride services, a move likely to have a significant impact on tech companies such as Uber .

Transport officials sent a document Monday to the legislature, asking lawmakers to further study the proposal. The officials also said they would further assess and iron out details, such as requirements for obtaining licenses and the number of vehicles that can be run through online platforms. Authorities plan to complete the legislative proposals sometime in 2025.

Hong Kong’s taxi industry has long resisted online platforms like Uber, seeing them as a threat to its business.

In Hong Kong, it is illegal for drivers of private vehicles to provide paid services to customers without a permit. Police have in the past arrested some Uber drivers suspected of driving without a permit and in 2018, the city's court system fined more than two dozen drivers.

Uber, which started operating in Hong Kong in 2014, remains a popular choice in a city where many residents are frustrated with poor taxi services.

The San Francisco-based company has faced many challenges in its overseas expansion meeting multiple legal and regulatory challenges.

In the document, the government said it hopes for a “win-win” situation for the transport industry and passengers through licensing and an improvement in the quality of taxi services.

To further curb illegal ride-hailing services, the city's transport authorities also proposed that when a car is found to be providing paid services to customers without a permit, judges could have the vehicle impounded and its license suspended — even if charges cannot be brought against the driver.

Uber welcomed the Hong Kong authorities' move to regulate ride-hailing platforms but also cautioned in a statement that it was "critical for the government to accompany this step with a workable licensing regime."

The statement also said that capping the number of “ride-sharing licenses” could be a blow to many drivers who rely on the platform for flexible earnings opportunities.

Lawmakers are expected to discuss the government proposals on Friday.