Government Announces 'Late-Night Taxi Shortage'... Mandatory Mid-Size Taxi Off-Duty System Abolished and Late-Night Call Fee Increased

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Abolition of Requirements for Conversion from Mid-size to Large Passenger Vans Revives Past Tada Model

Part-time Employment Contracts Allowed to Alleviate Corporate Taxi Driver Shortage

Maximum Flexible Nighttime Call Fee Raised to 5,000 KRW in the Seoul Metropolitan Area

[Asia Economy Reporter Kim Min-young] The government has decided to abolish the 'Taxi Rest Day System,' a mandatory rest system maintained for 50 years, to resolve the nighttime taxi shortage. To increase taxi manpower, corporate taxi driver applicants will be granted temporary qualifications allowing immediate taxi driving upon completion of necessary procedures such as criminal background checks. The current maximum call fee of 3,000 KRW during nighttime will be adjusted up to 5,000 KRW and piloted in the Seoul metropolitan area until the end of the year.

On the 4th, the Ministry of Land, Infrastructure and Transport announced the 'Nighttime Taxi Shortage Alleviation Measures' containing these details. The announced measures focus on △bold taxi regulatory reforms, △expansion of new types of mobility, △expansion of nighttime public transportation, and △activation of taxi services.

◆Abolition of Taxi Rest Day System and Simplification of Employment Procedures=First, the taxi rest day system introduced in 1973 will be abolished to allow taxi drivers to operate freely at night. The taxi rest day system is a regulation that forces taxis to take periodic mandatory rest days; it does not apply to premium taxis or eco-friendly taxis and is applied discriminately to mid-size taxis. The Ministry of Land plans to review the operation results of rest days by local governments, the status of nighttime taxi shortages, taxi supply and demand, and opinions from the taxi industry once every one or two years, and reconsider the extension of rest days through the Taxi Policy Deliberation Committee. In particular, for Seoul, where the taxi shortage is severe, it is recommended to abolish the taxi rest day system starting from October, before the system improvement.

The requirements for conversion from mid-size to large passenger vans or premium taxis will also be abolished. Previously, individual taxi drivers had to meet a 5-year accident-free condition to convert vehicle types, but the Passenger Transport Service Act Enforcement Rules will be revised to allow conversion without meeting this condition. Additionally, to increase the supply of eco-friendly premium taxis, vehicles meeting certain standards of electric or hydrogen cars will be allowed to operate as premium taxis, promoting the spread of eco-friendly taxis.

Employment procedures will also be simplified. Corporate taxi driver applicants will be granted temporary qualifications allowing immediate taxi driving upon completion of necessary procedures such as criminal background checks. However, they must obtain formal qualifications within three months after receiving temporary qualifications. Temporary qualifications will be initially operated under a regulatory sandbox until 2023 and institutionalized later considering the effects on alleviating taxi shortages.

Furthermore, to improve convenience for corporate taxi drivers who had difficulty commuting due to many garages (taxi companies) being located in suburban areas, the obligation for drivers to return to the garage after nighttime operation will be relaxed.

If a corporate taxi driver operates the same vehicle for two or more days and secures a separate parking space, the driver will be allowed to park and change shifts outside the garage, such as near their residence.

Also, the 'vehicle age system,' which prohibits taxi operation after reaching a certain vehicle age, will be made more flexible by considering mileage, allowing taxis to operate even after reaching a certain age if the mileage is low.

Moreover, while previously only passenger cars registered within one year could be used for taxi transportation, considering recent improvements in vehicle durability and quality, passenger cars registered within two years will also be allowed for taxi use.

◆Part-time Work Allowed for Taxi Drivers and Nighttime Call Fee Raised to Up to 5,000 KRW=Considering the shortage of taxi drivers during nighttime, from this month, part-time work will be allowed for taxi drivers holding driving qualifications (with completed criminal background checks) who wish to work, provided that employment contracts are signed and company management is strengthened.

The types of taxi operations will also be diversified. Improvements to corporate taxi lease systems (limited to nighttime), full management systems (salary-based), and other taxi operation types will be reviewed and discussed through consultative bodies. Through social grand agreements, platform transportation businesses institutionalizing past Tada and Uber models will also be activated. To substitute taxi demand, nighttime specialized services differentiated from taxis, such as nighttime safe return home services, nighttime commuting services, and demand-responsive nighttime models, will be actively introduced.

The flexible nighttime call fee will also be expanded. Limited to nighttime hours (10 PM to 3 AM), the current maximum call fee of 3,000 KRW will be adjusted to a maximum of 4,000 KRW for brokerage taxis and up to 5,000 KRW for franchise taxis, with a pilot application in the Seoul metropolitan area until the end of the year. The Ministry of Land plans to implement this in other regions with severe taxi shortages upon requests from local governments, platforms, and the taxi industry.

Application of the flexible nighttime call fee will be optional based on passenger preference, and the current free call option will remain available. Additionally, the call fee will be flexibly applied within the upper limit according to taxi demand and supply.

The flexible nighttime call fee will be sequentially launched by platform starting mid-month along with the abolition of the rest day system, and the individual taxi industry will support taxi supply expansion by organizing and operating nighttime shifts.

However, if nighttime surcharges in Seoul expand, adjustments to the flexible call fee will be reviewed comprehensively considering taxi supply and demand and public burden, and adjusted if necessary.

Moreover, the obligation to install taxi roof lights will be relaxed. The obligation to install 'taxi roof lights (gatdeung),' designed based on roaming operations in the past, will be eased to establish a foundation for differentiation and premium services of mid-size franchise taxis.

Going forward, the Ministry of Land will cooperate with local governments to activate Tada and Uber models, real-time call-type nighttime buses (urban nighttime DRT), and other services if nighttime taxi supply remains insufficient despite abolition of rest days, flexible call fees, and simplification of driver employment procedures.

Minister of Land Won Hee-ryong stated, "The current nighttime taxi shortage has exceeded a level that the public can endure," and emphasized, "The government will boldly abolish unreasonable regulations and practices deeply rooted in the taxi industry for the convenience of the public." He added, "Improving the treatment of taxi drivers, whose income is below the minimum livelihood level, is inevitable, and the flexible nighttime call fee is expected to improve the poor wage level by distributing most of it to drivers."

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