"Stomping Feet Every Night"... Ongoing Taxi Crisis, When Will There Be a Solution?

Three Months After Social Distancing Lifted... Taxi Crisis Persists
Government and Local Authorities Propose Taxi Supply Incentives
Still in Review Stage... No Immediate Major Changes
Shortage of Taxi Drivers Expected to Hinder Supply Increase

Three months have passed since the social distancing measures were lifted, but the taxi crisis continues, highlighting the need for a solution. On the afternoon of the 18th, citizens were waiting to take taxis at the Seoul Station taxi stand.
[Image source=Yonhap News]

[Asia Economy Reporter Kim Jung-wan] #. Shin (30), an office worker living in Seodaemun-gu, Seoul, recently wandered the streets late at night. After finishing a company dinner in Jongno, he called a taxi to go home, but no taxi was available for over 30 minutes. He said, "It's been a long time since social distancing was lifted, but even now, it's like trying to catch a star in the sky to get a taxi at night," adding, "These days, I hesitate to attend late gatherings because of worries about getting home." He continued, "The issue of not being able to get a taxi has been around for a long time and still hasn't been resolved, which is frustrating."

Since the full lifting of social distancing measures in April, the number of citizens out late at night has increased. As citizens' outdoor activities increased, the demand for taxis during late-night hours also rose, but supply remained insufficient, leading to a 'late-night taxi crisis.' Even after three months, the problem remains unresolved, and citizens' complaints are growing louder.

On the 25th, the Ministry of Land, Infrastructure and Transport announced that it is reviewing measures to expand late-night taxi supply, including a dynamic pricing system and the full lifting of the personal taxi three-shift system. On the 18th, the ministry reported to President Yoon Suk-yeol the new government's plan to apply a dynamic pricing system that allows platform taxis to increase fares by 25-100% during late-night hours (10 p.m. to 2 a.m.). The plan aims to encourage more taxi supply by raising fares during hours when demand exceeds supply.

They are also considering fully lifting the personal taxi three-shift system, where drivers work two days and rest one day. The expectation is that lifting this system will increase the number of personal taxis operating during late-night hours when passengers are concentrated, as drivers rest during the day. Although Seoul City has already implemented temporary lifting of the personal taxi shift system from 9 p.m. to 4 a.m. since April 20, the ongoing taxi crisis has prompted consideration of a full lifting.

Measures to activate ride-sharing platforms such as 'Tada' are also being considered. Type 1 platform taxis, which operate by renting cars, must pay 5% of their revenue as a social contribution and require approval from the Ministry of Land, Infrastructure and Transport to increase the number of vehicles. The ministry is reviewing ways to ease these regulations. Currently, only three companies operate a total of 420 Type 1 platform taxis.

The government and local governments have been presenting incentives to increase taxi supply one after another, but they remain at the review stage. On April 19, the day after the full lifting of social distancing measures for COVID-19 prevention, a citizen near Gangnam Station in Seoul is attempting to call a taxi using an app past midnight.
[Image source=Yonhap News]

Seoul City is considering a taxi leasing system as an alternative, where corporate taxi companies lease corporate taxi licenses to drivers not affiliated with the corporation, in addition to the temporary lifting of the shift system already in place. The expectation is that increasing the number of corporate taxi drivers will add 3,000 to 4,000 more taxis operating late at night than currently. Gyeonggi Province is preparing programs such as job fairs to recruit drivers, seeking fundamental solutions to the taxi crisis.

Although the government and local governments have been announcing various taxi supply policies to resolve the taxi crisis, most remain in the review stage, so no significant changes are visible immediately. According to Seoul City on the 29th, the number of taxis operating in Seoul from 11 p.m. to 2 a.m. the next day decreased to 16,000 in June last year, compared to an average of 24,000 in June 2019 before the COVID-19 outbreak. Although the number increased to about 21,000 following successive supply incentives, it is still insufficient compared to pre-COVID-19 levels.

Meanwhile, there are concerns that even if such incentives are introduced, supply will not easily increase. According to the National Taxi Transport Business Association Federation, the number of corporate taxi drivers nationwide decreased from 102,320 at the end of 2019 to 74,536 in May this year. Consequently, the corporate taxi operation rate dropped from 50.4% in the first quarter of 2019 to 31.5% in the first quarter of this year. Since the shortage of drivers caused the sharp decline, the number of drivers must increase, but without appropriate compensation measures, this problem cannot be resolved.

A taxi industry official said, "Older drivers are unlikely to work late at night to earn more, and relatively younger drivers tend to move to the transportation industry," adding, "The dynamic pricing system, which will be introduced temporarily, will not easily solve the problem." He further stated, "I think comprehensive support measures for the taxi industry are needed."

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