Uber’s Hong Kong operations on hold as government looks to regulate ride-hailing services – Uber Technologies (NYSE: UBER)

The Hong Kong government has announced its intention to regulate transport services, including Uber Technologies Inc. UBERcasting a shadow of uncertainty over Uber’s operations in the city.

What happened: Hong Kong’s Transportation and Logistics Bureau plans to license ride-hailing platforms like Uber and enforce stiffer penalties for rule-breaking. The bureau also aims to modernize taxi services by introducing premium fleets, Bloomberg reported Tuesday.

However, this proposal is unclear, which raises concerns. Oliver Chan, assistant professor at the Chinese University of Hong Kong, noted that unless the number of rental car permits is increased, many Uber drivers will continue to operate illegally. The South China Morning Post noted that officials have no plans to increase the quota.

See Also: Tesla CEO Elon Musk Considers Building a Replica of TARS from Interstellar Besides Optimus: ‘It Would Be So Sweet’

Uber, which has been operating unregulated in Hong Kong for a decade, welcomed the government’s plan but stressed the need for a workable licensing system. The company warned that any move to limit the number of ride-sharing licenses would impact drivers who rely on the platform for flexible earnings.

The Department of Transport plans to conduct a study of commuter needs to help shape the new regulatory regime, with the results expected within 12 months. Lawmakers will discuss the regulatory framework at a panel meeting on Friday.

Why is this important?: The development comes a month after Dida Inc. became the first publicly listed ride-sharing app in China. Dida’s listing on the Hong Kong Stock Exchange has the potential to impact the regulatory landscape for ride-hailing services in the region, including Uber.

Reduction: Uber shares closed at $71.25 on Monday, according to Benzinga Pro.

Read more:

Photo via Shutterstock

This story was generated by Benzinga Neuro and edited by Pooja Rajkumari