Amendment to the Passenger Transport Service Act Highlights Issues of Total License Quota and Contribution Fees

[Asia Economy Reporter Inho Yoo] The Ministry of Land, Infrastructure and Transport (MOLIT) is expected to face major disputes over the total number of licenses and the level of contribution fees during the discussion process of the enforcement decree for the amendment to the Passenger Transport Service Act, which is being promoted for mobility innovation.

According to MOLIT and the industry on the 1st, MOLIT will launch the 'Mobility Innovation Committee' within this month, composed of experts from various fields such as transportation, venture, and consumer sectors to derive benefits for stakeholders including the mobility industry and the public.

The amendment to the Passenger Transport Service Act, known as the Tada Ban Act, passed the National Assembly plenary session on the 6th of last month and the Cabinet meeting the day before yesterday.

Accordingly, MOLIT plans to work on stipulating detailed institutionalization measures in subordinate laws and regulations based on the amended law. Since the interests of the mobility industry, taxi industry, and consumers differ, MOLIT will discuss the subordinate laws through the Mobility Innovation Committee. Here, they plan to establish the operator's business methods linked to sales and usage frequency, as well as the scale and payment method of contribution fees.

The mobility industry and startups are also focused on the total license volume and contribution fees. The flexibility of the business can vary greatly depending on the total number of licenses permitted to platform transport operators classified as innovative types, the level of contribution fees, and the payment methods.

In fact, according to the amendment, the government determines the total number of licenses imposed on existing taxis and innovative types. This is a measure to manage the entry of newly emerging transport operators and prevent oversupply of all transport means. Innovative participating companies must also pay contribution fees to be used for taxi reduction projects.

However, the mobility industry believes that even if the Innovation Committee is launched, it will be difficult to reach an agreement on the total license volume and contribution fee system. Although MOLIT has held several meetings with the mobility industry regarding the amendment, it has not presented specific guidelines on the core issues of total license volume and contribution fee system. This is why there are criticisms that the Innovation Committee is merely a show.

Regarding this, MOLIT is cautious. It states that the criteria for startups eligible for contribution fee reduction benefits and the scale of contribution fees will be “decided later.” As for cases where the permitted total license volume exceeds the taxi reduction amount, MOLIT only repeats a general stance, saying “various measures are being considered.”

The mobility industry argues that the current total taxi license volume should be flexibly increased. They claim that flexibility must be guaranteed to enhance market dominance and acquire core competitiveness to grow into unicorn companies (startups valued at over 1 trillion won).

A startup official said, “If flexibility is not shown in total volume and contribution fees, investments will not come in,” adding, “There will be various pains as each party’s interests become entangled during the tug-of-war over enforcement rules and others in the future.”

This content was produced with the assistance of AI translation services.