The Federation of Trade Unions (FTU) on Monday called on the government to regulate online car-hailing platforms and require their drivers to obtain permits.

FTU lawmaker Michael Luk said taxi drivers have struggled to stay afloat in recent years due to competition with illegal cabbies.

"The taxi industry is facing a severe shortage of drivers, with 10 to 20 percent of taxis idle due to the unlicensed vehicles. Maybe some customers will choose other options," he said.

Luk said licensing online ride-hailing services wouldn't hurt the taxi trade and would lead to "fair competition".

"We don't think the ride-hailing services and the traditional taxis are [in conflict]. We think to get rid of the unlicensed vehicles... they can obtain more opportunities to develop the industry," he said.

But the lawmaker said officials can consider subsidising taxi drivers to buy fuel and insurance to minimise the impact.

On Friday, transport officials will brief lawmakers on the results of a study on ride-hailing services.