Rising Transportation Fares Increase Citizen Burden... "The Issue of Free Rides for the Elderly Must Be Resolved"

Seoul City Raises Subway Fare by 150 Won and Bus Fare by 300 Won
3 Trillion Won Loss Due to Free Rides for Seniors
"Need for Measures Including Related Law Amendments"

Seoul City has decided to raise subway and bus fares, increasing the burden on citizens. However, the city maintains that it will be difficult to resolve the chronic deficit issue unless the problem of free rides for senior citizens is addressed.

[Image source=Yonhap News]

On the 12th, Seoul City announced that the 'Public Transportation Fare Adjustment Plan' passed the city’s Price Countermeasure Committee review. According to the adjustment plan, the basic subway fare in Seoul will increase by 150 won from the current 1,250 won to 1,400 won starting October 7. Bus fares will increase as follows: main and branch lines by 300 won (1,200 won → 1,500 won), circular and differential lines by 300 won (1,100 won → 1,400 won), metropolitan buses by 700 won (2,300 won → 3,000 won), late-night buses by 350 won (2,150 won → 2,500 won), and village buses by 300 won (900 won → 1,200 won). The bus fare increase will take effect from the 12th of next month.

For subway fares, an additional increase is planned for next year. The city has decided to raise subway fares by another 150 won once more in the second half of next year. In April, the city had intended to raise subway fares by 300 won at once but faced opposition from the government’s public utility price freeze policy and citizen backlash, leading to a decision to increase fares twice over two years.

The purpose of this transportation fare increase is to resolve chronic operational deficits. Seoul Metro, which operates Seoul’s subway transportation, is estimated to have recorded a deficit of 630 billion won last year. In 2020, the deficit exceeded 1 trillion won. Seoul’s buses have also experienced an average deficit of about 540 billion won over the past five years. On the 3rd, Seoul Mayor Oh Se-hoon said at a press briefing marking the start of his 8th term, "I believe that raising fares by at least 300 won is necessary to solve the (subway) deficit," adding, "We negotiated the timing of the increase to ease the government’s burden."

Citizens expressed dissatisfaction with the transportation fare hike, saying it adds fuel to the already burdensome inflation. According to the 'May Business Labor Force Survey Results' announced by the Ministry of Employment and Labor on the 29th of last month, the real wage per worker from January to April this year decreased by 2.1% compared to the same period last year, amounting to 3,665,000 won. Although the consumer price index in May recorded its lowest in 19 months at 3.3%, utility fees directly related to daily life such as electricity, water, and gas rose by 23.2%. Han, a 29-year-old office worker, said, "The continuously rising fares are becoming a significant burden," adding, "I really feel that everything except my salary is going up."

Despite Citizens’ Strong Complaints... Seoul City Faces a Dilemma under the Urban Railway Act and Senior Welfare Act

[Image source=Yonhap News]

However, the city insists that fare increases are inevitable unless the issue of free rides for those aged 65 and older is resolved. According to the city, losses due to free rides for seniors account for about 300 billion won of Seoul Metro’s annual deficit. Last year, the senior population exceeded 9 million, and South Korea is approaching a super-aged society where seniors make up more than 20% of the total population, so losses from free rides are expected to increase further.

Currently, the Ministry of Economy and Finance (MOEF) only compensates for losses related to free rides for seniors under the Urban Railway Act for Korea Railroad Corporation (KORAIL). Public Service Obligation (PSO) loss compensation for local governments, including Seoul City, is not covered by central government support. Raising the age threshold for free rides is also difficult. According to the Senior Welfare Act, the state or local governments must support free or discounted use of transportation facilities for seniors aged 65 and older. Daegu City has announced plans to raise the free ride age threshold through ordinance amendments, but the Supreme Court ruled in 1996 that the Ministry of Health and Social Affairs could not narrow the scope of recipients for the old-age allowance age threshold set at 70 years or older beyond what the law stipulates.

A city official said, "Without amendments to the Senior Welfare Act or support from the MOEF, it is impossible to stop the growing deficit caused by free rides for seniors," adding, "Since the costs from free rides significantly affect the deficit, urgent measures are needed."

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