Court Rules "Suspension of Taxi Company Operation for Refusing Rides Is Lawful"

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[Asia Economy Reporter Seongpil Cho] A court has ruled that Seoul City's suspension of operations against a taxi company that refused passengers was lawful. This ruling holds not only the specific taxis but the entire company jointly responsible, which is expected to have a significant impact on the industry.

According to the legal community on the 26th, the Administrative Division 5 of the Seoul Administrative Court (Chief Judge Yangjun Park) ruled against taxi company A in a lawsuit filed against the Seoul Metropolitan Government seeking cancellation of a partial business suspension order. The court stated, "Acts such as refusing passengers undermine the essential function of taxis and cause disorder in the taxi transportation business and a decline in service quality," adding, "To eradicate such acts, it is necessary to impose effective sanctions above a certain level on the plaintiff to induce sufficient caution and supervision."

In April last year, company A received an order from Seoul City to suspend operations of 32 taxis for 60 days. The issue arose because 16 taxi drivers affiliated with the company were caught by on-site inspection teams refusing passengers or forcing passengers to get off during rides from November 2016 to July 2018, resulting in fines being imposed (a total of 18 times).

Company A filed a lawsuit, arguing that doubling the number of taxis subject to partial business suspension compared to the number of violating taxis was unfair. According to related enforcement ordinances, the government can impose sanctions for 60 days on twice the number of taxis involved in passenger refusal. Company A also claimed that the violations were minor and that Seoul City had excessively punished them. They argued that drivers were rushing to the restroom or returning to the company due to vehicle breakdowns, but the inspection team regarded these as illegal acts such as passenger refusal.

The court did not accept these claims by company A. It found no issues with the related enforcement ordinances and judged that the degree of violations such as passenger refusal was severe. The reasons given by drivers for refusing passengers, such as going to the restroom or returning to the company, were largely inconsistent with the testimonies of those involved at the time. The fact that drivers affiliated with company A were caught refusing passengers dozens of times beyond the 18 cases subject to this sanction also supported this judgment. The court stated, "The public interest gained by citizens outweighs the economic loss company A will suffer due to Seoul City's order." It was confirmed that company A has not yet submitted an appeal.

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