After a heated battle with Uber, the taxi calling service, the powerful New York mayor Bill de Blasio last week backed off from a plan to cap the number of new Uber vehicles allowed on city streets.

Instead, the thousands of New York taxi owners and drivers are countering the threat to their livelihood by replacing the old rambling taxis with cleaner and more efficient vehicles. These are more comfortable to sit in and can hold more luggage. What is more, the city's taxi operators are introducing a new taxi calling application that can compete with Uber on its own turf.

Japanese car maker Nissan won a 10-year contract from the administration of former mayor Michael Bloomberg to replace New York's taxi fleet with nimble minivans equipped with sliding doors, sunroofs and air-conditioning. The new taxis are expected to make up as much as 80 percent of all taxis on New York streets. City officials hope that the features of the more efficient new taxis can draw people away from Uber.

To fight against Uber, a new application is now being tested in more than 7,000 New York taxis. The new application, called Arro, allows users to hail and pay for taxi rides in the city. The major difference is that there is no surge pricing in Arro, while Uber fares increase when demand is high. With Arro, passengers pay only meter fares just like hailing a cab on the street.

Hong Kong taxi owners should try to come to terms with these advances in technology. They need to realize that even with the government on their side, they are fighting a losing battle against Uber and other e-hailing services which have become increasingly popular with commuters.

The presence of Uber in Hong Kong poses not only a direct threat to the income of taxi drivers but also the price of taxi licenses which are valued at more than HK$7 million apiece. Because of controlled supply, taxi licenses are a valuable commodity actively traded in the marketplace.

The stakes are undoubtedly high. But taxi owners do not have to fight Uber on legal technicalities. In doing so, they have projected an image of playing dirty in the eyes of many Hong Kong commuters who have grown tired of having to put up with unfriendly drivers, smelly taxis and fare rejections. Frequent reports of overcharging by some particularly unscrupulous drivers are definitely not going to help lift the image of the trade.

The taxi owners' association is known to be planning the introduction of its own version of a calling platform to counter Uber. This is a move in the right direction. However, it is not known how its application will work, or whether taxi drivers will support it or not over the same issues that they had when they rejected the use of Octopus as a form a payment - which revealed them to be more interested in tipping than passengers' convenience.

Upgrading the taxi fleet is another option taxi owners can take to combat Uber. This should not be too much of a financial burden because the cost of the vehicle is no more than 5 percent of the value of the license. Taxi owners can certainly afford to replace their fleet with better taxis.

New York is showing that traditional taxi services and Uber can coexist for the benefit of commuters. There is no reason why it cannot work in Hong Kong.

(HK Edition 09/09/2015 page6)