'The Common People's Feet' Seoul Subway May Stop?... "Fundamental Measures Needed to Save Seoul Metro"

Seoul Metro Union Declares Strike Starting September 14 if Seoul City and Government Fail to Negotiate... Calls for Active Measures on Fare Compensation and Subway Fare Adjustment... Urges Company to Pursue Management Rationalization, Asset Development, and Revenue Generation Through Technology Management

Kim Sang-beom, President of Seoul Metro, is visiting Gunja Vehicle Depot as his first official schedule and having a conversation with the officials.

[Asia Economy Reporter Park Jong-il] Will the Seoul subway, the "feet" of 10 million Seoul citizens and metropolitan area residents, actually come to a halt?

The Seoul Metro Union announced on the 23rd that "if the government and Seoul city do not respond to the union's demands and even refuse to engage in dialogue, we will go on strike starting September 14."

The union is demanding the withdrawal of restructuring, national government support for public service costs, and new youth recruitment. Above all, the union is most interested in the withdrawal of restructuring announced by the corporation.

They are also requesting the government to compensate for deficits caused by free rides for seniors aged 65 and over and people with disabilities.

Moreover, whether the subway unions of Busan, Daegu, Incheon, Gwangju, and Daejeon will join in a solidarity strike is expected to be confirmed in early September, and if the situation worsens, subways nationwide could come to a standstill.

The reason the Seoul Metro Union has taken the rare step of threatening a strike recently appears to be primarily due to the corporation's increasing deficits every year.

Especially last year, due to COVID-19, the number of passengers decreased, and deficits caused by free rides have snowballed.

Accordingly, with last year's deficit at 1.1 trillion won and this year's expected to reach 1.6 trillion won, the approximately 16,000 employees of Seoul Metro have become tense.

"The government must actively support the 300 to 400 billion won annual deficit caused by free riders"

The union attributes the deficit, which reaches 300 to 400 billion won annually due to free rides for the elderly and others, to the subway fares being frozen since 2015.

Both Seoul Metro (President Kim Sang-beom) and the union argue that losses caused by free rides for seniors should be subsidized by the government, but the Ministry of Economy and Finance has not agreed to this.

Seoul Mayor Oh Se-hoon has also expressed this position in media interviews.

On the afternoon of the 24th, Woo Hyung-chan, Chair of the Seoul City Council Transportation Committee, told reporters, "The government institutionalized free rides for seniors aged 65 and over to save health costs, but now financial support at the national level is absolutely necessary." He also emphasized, "Especially, while the government supports free rides for seniors on Korail, it does not support Seoul Metro, which is unfair."

Chairman Woo added, "In this regard, the city councils of Seoul, Busan, Daegu, Gwangju, and Daejeon jointly adopted a resolution with this content and delivered it to the government."

Additionally, there is a persuasive argument that to reduce deficits caused by free rides, the free ride age should be raised from the current 65 to 70, with a 50% discount for those aged 65 to 69.

Regarding this, a Seoul Metro official said, "We hope the government will show a more realistic and flexible approach rather than outright refusal."

"Seoul Metro needs management improvement efforts along with restructuring and rationalization"

Several months ago, Seoul Metro President Kim Sang-beom reported to Seoul city a restructuring plan to reduce 1,539 employees annually from 2021 to 2026 through improvements in work systems by sector, work efficiency, outsourcing non-core tasks to subsidiaries and external agencies. He also announced efforts to secure about 800 billion won by selling assets owned by the corporation to improve financial soundness.

This appears to be President Kim's desperate measure to reduce costs such as labor expenses to curb increasing deficits. It also shows his determination to prevent worsening management by selling valuable assets.

The direction seems appropriate. First, the corporation is showing belt-tightening efforts through self-help measures, and by requesting help from Seoul city and the government, the public may be able to support them.

However, the union is sensitive to the immediate prospect of employee restructuring and has taken a hardline stance with the threat of a strike. But as the COVID-19 situation prolongs and the lives of small business owners and the public become very difficult, it seems unlikely that the strike will proceed using the "feet of the common people" as an excuse.

Nevertheless, this opportunity should be used to actively pursue management improvements by reducing staff where necessary and generating profits where possible.

For example, the corporation announced plans to secure 800 billion won in financial soundness by selling assets such as the Sadang Complex Transfer Center site, the Yongsan 4 District International Building, and the Changdong Vehicle Depot site.

However, for such prime land near transit stations, options such as generating profits through development should also be considered.

Along with this, to reduce deficits caused by free rides, there is also a plan to improve the current payment system, which uses contact-based prepaid/postpaid transportation cards (T-money system) at station gate terminals, to a contactless mobile payment system suitable for the infectious disease virus era, which could generate hundreds of millions of won in annual revenue.

A senior official of the corporation said, "Our country has built the world's best communication environment. By utilizing this established digital convergence technology and verified ITS infrastructure technology, and building a mobile system using communication base stations in underground sections, we can provide convenience to subway users and use innovative technology that will significantly help management rationalization."

Ultimately, the corporation will need to pursue management rationalization, asset development, and technological management improvements simultaneously to generate profits.

It seems the time has come for the corporation's executives and employees, Seoul city, and the government to put their heads together and find solutions.

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