A lawmaker on Wednesday said it will be inevitable that ride-hailing drivers see their operating costs rise once new rules regulating the sector kick in, but those providing services regularly will stay on despite rising expenses.

Last week, the government proposed a regulatory framework for ride-hailing services that would allow platforms, vehicles and drivers to apply for renewable licences or permits.

Chan Pui-leung, a member of the legislature's transport panel, said setting "affordable" fees and levies will be key.

"Drivers who provide less ride-hailing services, such as those who only work once or twice a month, may consider whether it is still cost-effective to operate after the increased costs, leading to some exiting the market," he told RTHK's "In the Chamber" programme.

"But I believe that drivers who frequently provide ride-hailing services will consider continuing to operate."

As part of the proposals, owners of cars used for ride-hailing services would need to purchase third-party commercial vehicle insurance.

Chan, who is an insurer, said the trade currently does not have data to set insurance premiums for ride-hailing vehicles, as he called on the government to negotiate with platforms so insurance companies can obtain the necessary information.