Seoul Subway and Bus Fares to Increase by 300 Won Each Next Year

Seoul City "Plans Fare Increase for the First Time in 8 Years"
Specific Increase Prices to Be Decided by the End of April

Sindorim Station, Guro-gu, Seoul. / Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kiho Sung] The Seoul Metropolitan Government is planning to raise subway, city bus, and village bus fares for the first time in eight years. Since June 2015, when the basic fares for the subway and buses were increased by 200 KRW and 150 KRW respectively, the fares have been frozen for seven years and six months. The expected increase amount is around 300 KRW. The specific fare increase will be decided by the end of April next year.

On the 29th, Seoul City stated, "We have delayed the increase of public transportation fares as much as possible, considering it as transportation welfare that directly affects the livelihood economy. However, since the government budget excluded the local governments' subsidy for subway fare losses, operational difficulties have intensified, making it inevitable to raise fares."

Despite inflation, rising labor costs, and changes in demand since the 2015 fare hike, Seoul's public transportation fares have remained unchanged. However, compounded by the COVID-19 pandemic, the deficit this year has reached a serious crisis, with subway losses amounting to 1.2 trillion KRW and bus losses to 660 billion KRW.

Accordingly, Seoul City and others have argued that "since transportation welfare is a government policy, the government should compensate for the losses," but the government has only supported fare loss costs for KORAIL based on Article 32 of the Railroad Industry Development Act.

Seoul Mayor Oh Se-hoon recently said in a media interview, "If it is concluded that the government will not provide support, we may have no choice but to consider fare increases," adding, "We can no longer bear an annual deficit of 1 trillion KRW every year under the notion that 'transportation is welfare.'"

This year, Seoul Transportation Corporation's corporate bonds amount to 900 billion KRW, and Seoul City's financial support is about 1.2 trillion KRW. Additionally, operating agencies have been making self-help efforts by generating approximately 300 billion KRW annually from subway advertising and leasing businesses, and about 50 billion KRW from city bus operations.

Seoul City explained that public transportation fares are low compared to other domestic provinces and major overseas cities. In 2019, Gyeonggi Province independently raised bus fares within the metropolitan area, making them 250 KRW higher than Seoul buses. Compared to major overseas cities, Seoul's public transportation fares are between one-fifth and one-half of their levels.

If the current fare levels continue, the future fare realization rate is expected to remain around 60%. Considering that the fare realization rate improved to 80-85% at the time of the previous increase, a subway fare increase of 700 KRW and a bus fare increase of 500 KRW are necessary. However, Seoul City expects the decision to be around 300 KRW, reflecting a fare realization rate of 70-75%, taking into account the economic burden on citizens.

Seoul City plans to start consultations within this year with related organizations participating in the integrated transfer discount system, such as Gyeonggi Province and Incheon City, and proceed with public hearings, seek opinions from the City Council on the fare adjustment plan, and undergo review by the Price Countermeasure Deliberation Committee. The fare adjustment is expected to take place as early as the end of April next year.

Baek Ho, Director of Urban Transportation at Seoul City, said, "We have suppressed fare increases as much as possible for eight years as transportation welfare, but self-help efforts and financial support alone have reached a critical point where the severe deficit structure can no longer be overcome. We are reluctantly pushing for fare increases with the help of citizens, but we will continue to pursue a safe environment and service improvements for future generations and citizens."

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