{"id":2197736,"date":"2022-07-26T18:55:34","date_gmt":"2022-07-26T09:55:34","guid":{"rendered":"https:\/\/www.nknews.org\/pro\/?p=2197736"},"modified":"2023-04-05T16:12:07","modified_gmt":"2023-04-05T07:12:07","slug":"how-ride-sharing-services-like-uber-could-end-seouls-dire-taxi-shortage","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2022\/07\/how-ride-sharing-services-like-uber-could-end-seouls-dire-taxi-shortage\/","title":{"rendered":"How ride-sharing services like Uber could end Seoul\u2019s dire taxi shortage"},"content":{"rendered":"

In recent weeks, signs urging people not to \u201cdrink and cycle\u201d have been popping up around Seoul. The reason why will be apparent to anyone who visits the capital\u2019s busiest districts on a Friday night, or even a weekday evening.<\/span><\/p>\n

Seoul is suffering from a dramatic shortage of taxis, a problem that has become so acute in recent weeks that the transport ministry says that three in four people are unable to get a cab late at night.<\/span><\/p>\n

With buses and subway lines closed after midnight, failing to catch a ride will frequently leave one stranded with no choice but to <\/span>rent out<\/span><\/a> public bikes or electric scooters, or else trudge home on foot.<\/span><\/p>\n

\u201cI either try to find a night bus, or I walk to another area and try to hail a cab from there. Often finding a cab can take two hours or more,\u201d said Matthew Ashley, a Swiss journalist living in Seoul. \u201cI\u2019ve had to take an e-scooter before because there were no other options.\u201d\u00a0<\/span><\/p>\n

Demand for cabs fell dramatically over the first two years of the COVID-19 pandemic, leading many cab drivers to switch to new professions.\u00a0<\/span><\/p>\n

But then demand rebounded almost instantly after the government mostly lifted virus prevention measures in April. Ride calls on the country\u2019s most-used taxi-hailing app KakaoT <\/span>surged 333%<\/span><\/a> in the week following the rollback compared to the same period in 2020.<\/span><\/p>\n

It\u2019s clear that cab drivers <\/span>aren\u2019t getting back behind the wheel<\/span><\/a> due in part to low pay. And some experts say the only way out of the predicament is for South Korea to finally embrace new ride-sharing services like Uber that it has so far banned or curtailed.<\/span><\/p>\n

\"\"

South Korean won | Image: Pixabay<\/p><\/div>\n

LOW WAGE, HIGH AGE<\/b><\/p>\n

Cab drivers were <\/span>already hanging up their keys<\/span><\/a> before the pandemic hit, with driver numbers dwindling from <\/span>nearly 140,000<\/span><\/a> in 2009 to 100,000 in 2019, according to the Korea National Joint Conference of Taxi Association.<\/span><\/p>\n

The biggest issue has been poor pay and working conditions. Most of those who left the industry were \u201ccorporate taxi drivers” who operate licensed vehicles owned by cab companies, in contrast to self-employed taxi drivers who have their own licenses.<\/span><\/p>\n

While self-employed drivers are able to work and increase their profit flexibly, corporate drivers are required to make <\/span>daily lease payments<\/span><\/a> of around 140,000 to 175,000 KRW (around $106-130) to their company, regardless of earnings. Thus, many drivers have found it increasingly hard to keep afloat in recent years, due to cheap taxi rates set by the local government.<\/span><\/p>\n

\u201cI\u2019m already working 12 hours a day to make 3 to 4 million won per month,\u201d Park Heung-jin, a Seoul-based taxi driver told <\/span>Korea Pro<\/span><\/i>. \u201cI am seriously considering just calling it a day and selling my license.\u201d<\/span><\/p>\n

Then, as passengers declined due to the pandemic-induced social distancing, <\/span>some 30,000 cabbies<\/span><\/a> nationwide decided to leave the industry between the end of 2019 and May this year, with one-third of the number based in Seoul.<\/span><\/p>\n

The outflow of corporate drivers leaves a larger proportion of self-employed drivers <\/span>in their 60s and 70s<\/span><\/a>. But given their age, most self-employed drivers tend to avoid late night work and physically straining hours.\u00a0<\/span><\/p>\n

Thus, the flight of the relatively younger corporate drivers has exacerbated the pre-pandemic shortage of nighttime taxis, with the number of cabs operating between 11 p.m. and 2 a.m. <\/span>falling<\/span><\/a> to 19,468 in June, down 22% on-year, according to the Seoul city data.<\/span><\/p>\n

To bring drivers back, the transport ministry is mulling an increase in nighttime rates of between <\/span>25 and 100%<\/span><\/a>, and expanding hours from the current midnight to 2 a.m. to 10 p.m. to 2 a.m.\u00a0<\/span><\/p>\n

The government is also considering <\/span>scrapping the rule<\/span><\/a> that requires self-employed cabbies to take every third day off, and even preventing drivers from refusing passengers by concealing their destinations on ride-hailing apps. It may even allow unlicensed mini-vans to operate like taxis.<\/span><\/p>\n

However, such measures are unlikely to be enough to attract new drivers, according to Kim Yong-jin, a professor at Sogang Business School.<\/span><\/p>\n

\u201cThe rates have to be raised in multiples, to reflect real demand as well as soaring inflation. But that level of increase is highly unlikely as taxi costs are considered public utility costs,\u201d Kim told <\/span>Korea Pro<\/span><\/i>.<\/span><\/p>\n

Many former taxi drivers have migrated to food delivery platforms, with high demand meaning they can receive <\/span>compensation<\/span><\/a> of at least 6,000 to 7,000 KRW per order ($4.50-5.35). Peak hour bonuses can take the total up to 27,000 KRW ($20) for a single journey.\u00a0<\/span><\/p>\n

Meanwhile, the<\/span> basic taxi fare<\/span><\/a> adjusted by municipal authorities has been stagnant at 3,800 KRW ($2.90) since 2019. Late-night rates from midnight to 4 a.m. start at 4,600 KRW ($3.30).\u00a0<\/span><\/p>\n

\u201cAt the current rate, and with minuscule increases, young people who value a work and life balance are unlikely to sign up for long, grueling hours when they can make several times more as platform workers,\u201d Kim said.<\/span><\/p>\n

\"\"

An animated ride-share app | Image: Pixabay<\/p><\/div>\n

EMBRACING INNOVATION<\/b><\/p>\n

As the taxi shortage stretches on, media and experts argue that new mobility solutions such as car-pooling and ride-sharing could have provided more diverse and accessible options, and also streamline the taxi industry to make it more competitive and sustainable.\u00a0<\/span><\/p>\n

However, South Korean laws have <\/span>severely limited<\/span><\/a> such platforms, <\/span>choking<\/span><\/a> new mobility services like Uber as well as domestic ride-sharing apps such as Tada and Poolus.<\/span><\/p>\n

These were attempts to quell taxi unions, which staged large-scale protests against mobility apps, with two drivers even <\/span>setting themselves on fire<\/span><\/a>. But this did not prevent drivers from abandoning ship during the pandemic, leaving no alternative transport options.<\/span><\/p>\n

\u201cWhat should have been done years ago was research and experiment with ways in which new services can be rolled out and lead to the betterment of mobility as a whole, instead of simply blocking the inevitable changes taking place globally,\u201d said Kim.\u00a0<\/span><\/p>\n

In Quebec, for instance, taxi drivers also opposed Uber\u2019s arrival. But instead of rejecting the platform, provincial authorities introduced <\/span>Bill 17<\/span><\/a> in an effort to help Quebec\u2019s public transport adjust to new mobility services.<\/span><\/p>\n

\u201cIt wasn\u2019t just about Uber. The city aimed for a system-wide improvement to its transportation services as a whole,\u201d said Andrew Lim, research and innovation attach\u00e9 at the Quebec Government Office in Seoul.<\/span><\/p>\n

The bill scrapped the taxi license system to enable more entrants to benefit from the growing mobility market, but it <\/span>compensated<\/span><\/a> traditional taxi drivers for their licenses, with Uber partially contributing funds.\u00a0<\/span><\/p>\n

\u201cIt took years of pilot testing during which there were demonstrations and opposition, but now, ride-sharing is now an established part of Quebec’s transportation,\u201d Lim said.<\/span><\/p>\n

South Korean authorities are finally acknowledging that fundamental changes are needed.<\/span><\/p>\n

Transport minister Won Hee-ryong<\/span> said<\/span><\/a> last week that \u201cthe context has changed since the former administration banned mobility services,\u201d hinting the new government will ease restrictions on the likes of Tada, Poolus and Uber.<\/span><\/p>\n

And according to Lim, as new mobility solutions continue to evolve, it is \u201cessential to catch up sooner as it will get harder to catch up later.\u201d<\/span><\/p>\n

Edited by Bryan Betts<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

In recent weeks, signs urging people not to \u201cdrink and cycle\u201d have been popping up around Seoul. The reason why will be apparent to anyone who visits the capital\u2019s busiest districts on a Friday night, or even a weekday evening. Seoul is suffering from a dramatic shortage of taxis, a problem that has become so […]<\/p>\n","protected":false},"author":3665,"featured_media":2197737,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24],"class_list":["post-2197736","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy"],"yoast_head":"\nHow ride-sharing services like Uber could end Seoul\u2019s dire taxi shortage - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2022\/07\/how-ride-sharing-services-like-uber-could-end-seouls-dire-taxi-shortage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How ride-sharing services like Uber could end Seoul\u2019s dire taxi shortage - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"In recent weeks, signs urging people not to \u201cdrink and cycle\u201d have been popping up around Seoul. 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