Seoul Metro Officially Requests 576.1 Billion Won in Government Funding to Cover Free Ride Losses

On April 16, Seoul Metro officially announced that it had formally requested 576.1 billion won in government funding, stating that it can no longer bear the losses from free rides. This is the first time an urban railway operator has sent an official letter to the government, specifying the exact amount of compensation needed.

Headquarters of Seoul Metro. Courtesy of Seoul Metro.

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The company sent official letters to the Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, the Ministry of Health and Welfare, and the Ministry of Patriots and Veterans Affairs, asking for the legalization of government funding for free ride losses and for financial support. The letter stated, "If the revision of the Urban Railways Act currently pending in the National Assembly and other relevant legislation is delayed, please compensate the amount of 576.1 billion won with state funds."

The requested amount of 576.1 billion won accounts for 74.3% of last year's total free ride losses across the nation’s six urban railway operators (Seoul, Busan, Daegu, Incheon, Gwangju, and Daejeon), which totaled 775.4 billion won. Seoul Metro argued that this percentage matches the average compensation rate for public service obligation (PSO) costs that KORAIL has received from the government over the past nine years, in accordance with the Framework Act on the Development of the Railroad Industry.

At Sindorim Station, for example, if a free-ride passenger passes through the gate of Line 1 operated by KORAIL, the government covers the loss. However, if the same passenger uses the gate for Line 2, managed by Seoul Metro just a few steps away, Seoul Metro itself must bear the full cost.

Last year, out of the total net loss of 1.4875 trillion won across the six operators, free ride losses accounted for 775.4 billion won (52.1%). Seoul Metro suffered the highest amount of free ride losses at 448.8 billion won. As of last year, the company’s accumulated deficit reached 19.749 trillion won.

The free ride system was introduced in 1980 by presidential order and was established as a full (100%) discount for those aged 65 or older with the revision of the Elderly Welfare Act in 1984. At the time, the aging rate stood at 4%, but it has since increased more than fivefold to 21.2% this year. Statistics Korea projects that this rate will reach 40.1% by 2050.

Meanwhile, on April 15, the first hearing was held for the damages lawsuit filed by Seoul Metro against the Ministry of Patriots and Veterans Affairs, demanding the return of 3.7 billion won in free ride costs for national merit recipients. At the hearing, Seoul Metro argued, "If the state requires others to fulfill its duties and does not provide compensation, it will cause significant difficulties," adding, "It is reasonable for the government to enact laws so that fair compensation is ensured." Currently, the Ministry provides subsidies for free rides for national merit recipients to all national bus associations, KORAIL, and SR.

Han Younghee, Head of Planning at Seoul Metro, stated, "All social benefits from free rides are attributed to the nation," adding, "We ask for the public’s active interest and support for the revision of related laws and government funding to ensure the system’s sustainability."

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