Transport minister Lam Sai-hung on Saturday said future taxi fleets will have to allow digital payments, install video recording technology, and should respond to complaints.

Lam told a Commercial Radio programme that he hopes this government initiative to step up taxi management will enhance service standards.

"We hope the fleet management will... shift the culture of the whole taxi industry, because we have got to change. If we go on like this, the taxi industry will just get worse and people will have less and less confidence in it," he said.

The official said applications for taxi fleet licences are closing at the end of the month, and the licences will be issued in mid-2024.

He said the fleets should start operating within a year.

Meanwhile, Lam said the upcoming taxi fare hike is needed so the industry can stay financially sustainable.

He said taxi drivers earned HK$17,000 to HK$20,000 a month on average last year, and some of them had seen their income fall.

"After taking into account inflation, some taxi drivers - for example those working on Lantau - earned a lower income than they did in 2019. We think this isn't good for the taxi sector's long term development," he said.

"The cost of gas and insurance have also gone up. We considered these factors before reaching the decision."

The minister said they had also considered if people would accept a fare hike, before announcing that flagfall for all taxis will rise by HK$2 from July 14.