Dispute over taxi fares
Seoul city should check various options before pushing for taxi fare hike
The city of Seoul’s plan to raise taxi fares from next year is sparking disputes over whether it could be a viable solution to the growing shortage of night taxis.
The Seoul Metropolitan Government recently filed a plan for raising taxi fares with the Seoul Metropolitan Council, as an increasing number of people find it extremely difficult to hail a taxi at night in crowded places like the area. from Gangnam Station in South Seoul.
Under the plan, the base fare would rise to 4,800 won ($3.50), up 26% from the current 3,800 won. The distance covered by the basic fare should also be reduced from 2 kilometers to 1.6 km. The night surcharge is also expected to increase.
The controversial plan comes as the mismatch between passengers and taxi drivers widens. Given the related factors, it seems quite difficult to fix the problem, even with the drastic rate increase proposed by the city.
During the pandemic, people’s outdoor activities have inevitably taken a dive. This has led to a sharp drop in the income of taxi drivers. Many taxi drivers, especially those in the younger age group, quit and sought other better paying jobs in other transport sectors.
As young taxi drivers provided the bulk of services at night, the labor shortage resulted in a severe shortage of available taxis in crowded neighborhoods at night.
According to the city of Seoul and the taxi industry, the average number of taxis operating at night is around 20,000, down from 5,000 to 6,000 from before the pandemic. The number of licensed company taxi drivers also increased from 31,130 in 2019 to 20,710 in May this year. And more than half of private taxis are driven by people aged 65 or over, a group reluctant to offer night taxi services.
To address the shortage of taxis, the city of Seoul has implemented a series of policy measures. But the shortage is unresolved amid growing complaints from passengers struggling to hail a taxi.
In this context, the increase in taxi fares is a desperate attempt by the city of Seoul to find a breakthrough. But it is debatable whether increasing the fare would attract new taxi drivers and lead to more taxis operating at night.
First, the positive effect of such a fare hike could evaporate if corporate taxi companies increase the mandatory daily fee that taxi drivers must pay, thus keeping real income nearly the same. The mandatory target royalty system has been banned, but some companies still maintain this practice indirectly.
That means the city of Seoul would have to come up with new measures to improve the working conditions of hired taxi drivers if it wants the fare hike plan to have any real impact.
Another concern is the possibility that the proposed taxi fare hike could put additional inflationary pressure on a local economy that is already struggling with soaring consumer prices, a weakening local currency and trade deficits in booming. In addition, utility rates such as electricity are expected to be increased in the coming months. The new taxi fare, if implemented from next year as planned, will end up placing an additional burden on many households.
Considering the unstable economic situation, an upcoming rise in taxi fares, coupled with the same quality of service, is likely to generate complaints from passengers, making those on a tight budget more reluctant to use taxi services. taxi and to opt for other public transport such as buses or metros.
Starting this week, the Seoul Metropolitan Government plans to collect public opinion on the proposed base taxi fare increase. He should carefully weigh all related factors and explore various options before pushing for a price increase.