Riding the Fifth Wave

One April morning, as Yeung Wing Leung was walking towards his office, the neighboring mechanics passed him the news. His immediate reaction to the rent hike was disbelief, but that quickly soured into outrage. After months of struggling to stay open amidst the pandemic, and having to watch his employees leave one-by-one, the last thing the mechanics shop owner expected was another blow like this.

The first [motorcoach] is my office and the last is my garage.

Two years of fighting to stay afloat, and this rent raise looked to be the nail in the coffin for Mr Yeung’s shop. Underneath the towering seaside cranes of Stonecutter Island, Mr Yeung walks amongst a row of crippled motorcoaches. “The first [motorcoach] is my office and the last is my garage,” says Mr Yeung as he points out to the buses.

The father of three adds that becoming a mechanic was always his childhood dream. Before opening his Wing Leung Motor Service Co. in 2017, he co-owned a mechanic shop in Kam Tin. “Before the pandemic, I would fix around 10 cars earning 60-70 thousand, after the pandemic, I only fixed 1-2 buses earning around 10 thousand a month,” says Yeung.

The pandemic has hit the transportation sector hard, but it is not only the drivers being affected. People employed in related peripheral businesses like Mr Yeung suffer greatly from governmental restrictions and lack of financial support. “The government hasn’t provided any financial aid for us even in 2019 and during the pandemic. The financial aid only helps tourism and restaurants but not us repair shops,” he says. In fact it was mostly tourist buses that made up a considerable section of Mr Yeung clientele in the past.

Trapped without Tourists

In the past Hong Kong’s unique position as the gateway into China has boosted its status as an international business and financial hub. However, political and anti-epidemic policies over the past two years have left this status being threatened.

Despite the forecasted growth of the Hong Kong economy by 2% to 3.5% in 2022 according to HKTDC Research group, one of the its strategic pillars, the tourism sector, remains severely impacted, with its slow recovery extending to related businesses.

Tourism is an important source of income (4.5% of GDP) and employment (6.6%) for Hong Kong according to statistics from 2018. Research Memorandum issued by Hong Kong Monetary Authority in 2021 indicates that in 2018 inbound tourism contributed to around 3.6% of GDP.

Although a lot of the government’s attention within the tourism industry has been dedicated to retail, accommodation and dining services, there has been a limited focus on cross-boundary passenger transport services, which account for around 0.5% of GDP and 0.6% of employment in 2018.

Meanwhile the Hong Kong Tourism Board reported a 97.4% drop in the number of visitors in 2021. With tourists gone, an impact can be seen across the board from taxi drivers, to minibus drivers, to peripheral businesses linked to the transportation sector.

But the financial struggles stem from more than just the downturn in tourism. For mechanics like Yeung who work to grease the gears of Hong Kong’s transportation sector, what happens when people simply stop traveling outside?

Adaptations made by Mr. Wing to comply with the government pandemic restrictions.

Since the onset of the Coronavirus pandemic in early 2020, the government has followed a strict zero-Covid policy. Stringent social distancing measures, work-from-home orders and travel restrictions coupled with the cessation of the city’s nightlife brought the city’s hustle and bustle to a halt.

According to the Research Office of the Legislative Council Secretariat, the daily number of passengers on public transport dropped by almost 40% to below the 9 million mark. Being the most reliant on tourists, the Star Ferry has lost over half its ridership since the start of the pandemic. Both red minibuses and the MTR have seen passenger numbers drop by about a third, whereas most other forms of transportation have suffered roughly a quarter of their usual customers. Ferries in Hong Kong remain the public transport least impacted with a loss of only 10 to 15% of passengers.

Overall, unemployment within the sector peaked at 15,300 in the February-April quarter of 2021. In terms of unemployment rate, the transport sector rose to 7.1% compared to the total average of 6.4%. Unemployment had begun to decrease for the remainder of 2021 until the start of the fifth wave in early 2022. Unemployment within the transportation sector currently stands at 5% which is in line with the overall unemployment rate across all industries.

In the hopes of hampering the loss of business, the government has announced six rounds of financial aid to the various sectors impacted since 2019.

Government Relief for Taxis and Minibuses

Since 2020, the transportation industry has enjoyed multiple rounds of Anti-epidemic Funds provided by the Hong Kong government. These pandemic relief packages range from one-off subsidies for registered public transportation owners or operators to COVID-19 free tests.

Eco Fuel Gas station at Sham Mong Road.

With increasing fuel prices as well, the government provided a petroleum gas subsidy for public light buses and taxis. For instance, from July 2020 to June 2021, Light Petroleum Gas taxis and minibuses that received the subsidy were entitled to $1 per liter of light petroleum gas.

While one-third of the actual fuel cost of diesel for public light buses and petrol taxis using such fuel were reimbursed.

Besides this, the government has provided subsidies to individual taxi and minibus drivers back in 2020, and has also allocated a one-off, non-accountable, subsidy of HK$30,000 for each licensed public transport driver again in the 2022 sixth round of Anti-epidemic Fund. Applications will run through 31 May 2023.

As of present, although the fuel subsidy has been included into the 2022 Anti-epidemic Fund again, the government has yet to announce the next round of fuel subsidy for taxis and minibuses.

Individuals Struggling to Make a Living

Despite over five billion dollars of relief under the Anti-Epidemic Fund being granted to the public transportation sector, many drivers and peripheral businesses are still struggling to stay afloat. In fact, most of the people spoken to claimed to not have received adequate, if any, financial support from the government relief fund:

Leung Ka Lok, 42, taxi driver

“Not in service,” was pasted on the little sign behind the red taxi’s windshield. Leung Ka Lok sat in a shaded spot beside the Central Ferry Pier. Through the driver seat window, he took a drag of his cigarette, paused for a moment, before exhaling it back out towards the afternoon sun.

“I have been a taxi driver for five years now. I used to work a lot of odd-jobs, the last job I had before becoming a taxi driver was in the kitchen. I became a taxi driver because I was struggling with financial issues and also wanted to have more freedom.

I am currently renting this taxi from an agent in Wanchai for $420 per 12-hour shift. These agents may own 100 taxis and us drivers rent the taxis from him. I am not sure if the government has supported these taxi agents, but the government certainly has not provided any financial aid for me. In terms of support, the Uber Taxi scheme has helped a little by making it more convenient to find customers, but it didn’t help a lot during the pandemic.

The pandemic has cost me around a third of my daily customers. These days I don't even get ten customers a day. So even though rent has not increased it is still hard to make ends meet. There was one time when I only earned enough to cover the rent of the taxi and had to pay out of my own pocket for other costs.”

Ng Wai keung, 50, taxi driver

Ng Wai Keung sits second in the column of red taxis idling by the Cross-Harbour taxi stand.

“It’s been three and a half years since I quit my job and started driving taxis. I used to work in funeral management but becoming a taxi driver seemed like it would offer more freedom.

Everyday I pick up and return my taxi in Kowloon, so that’s normally where I pick up most of my customers. Most of my customers used to be students or teachers going to school but these days things are very unpredictable. With everybody working or studying at home, I may only get 10 to 20 customers a day and the on-call taxi apps don’t really help me earn more. Everyday I have to pay about $300 to use this taxi for 12 hours. Luckily, I have never had to use my own money to pay for the taxi’s rent.

The last time the government provided subsidies was back in 2019 but I haven’t received any support since then. I really hope that the government can provide cash subsidies for our gas, I think this is the main issue. Gas is now $5 to $6 per liter which is double what it was last year.”

Law Kee Wing, 59, minibus driver

Law Kee Wing parked his empty green minibus at the resting terminal and clambered up from the driver’s seat. As he stood in his bus’ doorway he said:

“I initially became a minibus driver because I couldn’t find work as a salesman and my friend recommended me to take up the job. I don’t own the minibus, I just operate it for the company and I’ve been doing so for about a decade now.

I’ve gotten used to the pandemic, I mean how can I not have? For almost two to three years I’ve been wearing multiple masks and it’s very stuffy inside the minibus.

Before the pandemic, I worked every day of the week. These days there are fewer schedules, meaning I only work three or four days of the week and this means I can’t earn a lot of money.

I did not receive the $30,000 subsidy from the government, I didn't even know we have the subsidy. The government has only provided financial aid for our boss, for the minibus company, but not for us drivers. I think it’s best for the government to provide financial aid for the drivers individually instead of the company’s boss. Our boss didn’t even help us at all.”

Yeung Wing Leung, 54, mechanic

All three drivers echoed Mr Yeung’s sentiment that the government has failed to provide sufficient aid.

“The government helped me by giving me low-interest loans but now I’m being chased up and have to find a way to pay them off somehow. In total I borrowed $150,000 from the government. I started borrowing last year to pay rent and salaries and keep the business running but the pandemic has lasted so long that the money is just not enough.

Rent for my shop is currently $42,000 a month and I don’t earn enough to afford it. The landlord already increased the rent by $20,000 last year, and next month he is increasing it by $10,000 more. The relief that allows businesses to pay their rent at a later time only applies to restaurants, not us repair shops. I have called the government to complain but they said they can’t control how much the landlords increase their rent.

My staff has already dropped from five or six people last year to just me and my sister who works as my accountant. There’s not much more I can do. Just like the other repair shops next to me, I think my company will close down in a couple of months because I simply have no money for the rent.

I will probably declare bankruptcy to clear the government loan. After that, I've been thinking about becoming an Uber driver to bring in revenue. It’s hard because I still have three kids in school. My wife has recently had to take up a job to help too.

If I do re-open my shop, I am considering moving back to Kam Tin road because the rent is a lot cheaper there.”

The $30,000 one-time subsidy provided by the government for taxi and red minibuses are targeted towards the owners who hold the vehicle licence. All of the taxi drivers interviewed operated their taxis and thus were not the vehicle licence owners. This is the norm in the taxi industry where the price of a taxi vehicle and permit can cost as high as $7.6 million in 2013 according to the SCMP. Thus most taxi drivers are renters who pay agents to drive the vehicle on 12 hour shifts. This begs the question, are all the government subsidies being given to the taxi companies and agents? 

The government and the Taxi and Public light bus Chamber of Commerce did respond to these complaints at the time of publishing.

However, the epidemic situation has substantially alleviated since March, with a downward trend in local cases. The Hong Kong Government announced on April 14 that the first stage of relaxed social distancing measures will take effect from April 21 to May 4, with further relaxation later on May 19th.

This gradual return to normalcy might finally be the glimmer of hope everyone is waiting for.

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