[The Editors' Verdict] Taxi: Tada vs. Not Taking One

Midnight Taxi Crisis Solution Foresees Sharp Fare Increase; Structural Reform Delayed Amid Aging Workforce and Low Wages
Enhancing Self-Sustainability While Adapting to Mobility Changes

"Can I follow you home?"

This is the title of a program broadcast by Japan's TV Tokyo. At a time when the last buses and subways have stopped running, the show offers to pay taxi fares for people met on the street to follow them home and conduct interviews there. The starting point of the program is Japan's famously expensive taxi fares. Comparing Seoul and Tokyo taxi fares easily, Seoul’s Kakao regular taxi fare corresponds to Tokyo’s Kakao Black (3 to 4 times more expensive than regular taxis) for the same distance. Based on a simple exchange rate (100 yen = 1,000 won), Seoul charges 3,800 won for up to 2 km, while Tokyo charges 4,200 won for up to 1.2 km. Additionally, the per-meter distance fare is more expensive in Tokyo (800 won per 276 m) than in Seoul (100 won per 132 m), and the late-night surcharge is 20% in Seoul (0:00?4:00) and 20% in Tokyo (22:00?05:00). The government and Seoul city have decided to raise the base fare to 4,800 won and increase the late-night surcharge (from 10 p.m. to 3 a.m.) call fee up to 5,000 won. Seoul taxi fares have now caught up to Tokyo’s level.

Taxis are not officially recognized as public transportation but have been subject to regulations similar to public transit. For the government and local authorities, recognizing taxis as public transportation would inevitably cause a massive increase in fiscal burden. Even now, thousands of billions of won are invested annually just to cover deficits in buses and subways. The taxi industry has preferred to be regulated and supported as quasi-public transportation rather than being fully recognized as public transit. Meanwhile, the taxi workforce has aged severely, and structural reforms including fare systems have been delayed. With the advent of COVID-19 and the platform economy, taxi drivers now earn less than 3 million won per month, and the influx of younger drivers has effectively stopped.

Consumers have a different perspective. Generally, the need for taxi fare increases is acknowledged but should be decided at a level that is bearable. Just because there are no taxi drivers or a taxi crisis occurs, it is unreasonable to suddenly accept fares as expensive as those in Tokyo, New York, or London. This also contradicts inflation policies that have suppressed public utility fare increases amid high inflation. There is no guarantee that taxi service will improve significantly even if fares rise sharply.

Another point to consider is whether it must be a ‘taxi’ specifically. Currently, there is no competitor to taxis. The Korean Taxi Cooperative, which abolished the chronic problem of the corporate taxi’s daily quota system, once operated a coop taxi but went bankrupt due to financial difficulties. Former lawmaker Park Gye-dong, who led the coop, has stated in media interviews that he intends to revive it, but it remains to be seen.

Tada, a competitor to taxis, triggered collective opposition from the taxi industry as an ‘illegal call taxi.’ Eventually, the National Assembly passed the Tada Prohibition Act in 2020, making it illegal. Tada’s management has been acquitted of passenger transport law violations in both the first and second trials, with the Supreme Court’s decision pending. The government has stated it will activate the Tada and Uber models through social compromise. It is doubtful whether the taxi industry will allow this. The Tada Prohibition Act was ruled constitutional by the Constitutional Court, and the National Assembly that enacted the law must amend it.

During the last presidential election, Yoon Seok-yeol of the People Power Party and Lee Jae-myung of the Democratic Party each held meetings with the taxi industry. At these meetings, both criticized platform monopolies and mentioned a ‘public taxi call app.’ This was criticized as short-sighted populism attempting to compete with the private sector in the market. Of course, this was ‘naturally’ excluded from the current measures. Although there are rosy prospects for future mobility such as autonomous taxis, robo-taxis, and flying taxis, taxis will undoubtedly remain a major mode of transportation for a considerable time until these are realized. While the current focus has been on whether or not to take taxis, now we must consider how long and in what ways taxis and the mobility era can coexist. Lee Kyung-ho, Social Affairs Chief gungho@

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