Seoul taxi basic rate and night surcharge may rise 20% or more, night call fee may triple

[Photo by Kim Ho-young]

Nighttime cab call charges could be tripled nationwide, while basic taxi fare and nighttime surcharge would go up by more than 20 percent in Seoul as the central and capital governments grapple with loss of taxi drivers due to fast aging and migration to better-paying delivery services.

According to Seoul Metropolitan Government, about 4,099 taxis are short in the capital from 11 p.m. and 2 a.m. as of May and 4,556 lacking at around midnight.

“The rate of successfully grabbing a taxi via car-hailing platforms like Kakao T that had been at 60 percent in March fell to 30 percent these days,” said an unnamed government official. “Something needs to be done before temperature falls in winter.”

The government and Seoul city are reviewing the option of introducing a flexible taxi fare system that can more than doubles basic fare and driving and travel fares, which starts from 3,300 won~3,800 won for the first 2 kilometers in major cities, to resolve supply-demand issues.

The move is to keep drivers from migrating to delivery jobs that offer up to 2.5 times the monthly salary of 2 million won.

The number of taxis managed by corporations and individuals reached 249,667 units as of end of May. The government, however, estimated that more than 30,000 taxi drivers have moved out from taxi companies when compared with pre-Covid times in 2019.

The government has turned to raising taxi call fees during night hours as not to give further inflationary pressure. A rise in taxi fare itself is reflected in consumer prices compiled by Statistics Korea but not taxi call fees. It also considered how a rise in taxi fares do not directly lead to higher income of taxi drivers.

The government is considering introducing a guideline that raises taxi call fee to up to 9,000 won per taxi brand like Kakao T and Uber Taxi, up from 3,000 won, and offering 70 percent of the hike to taxi drivers. Only half of the call fee go to taxi drivers now.

“The average income of taxi drivers will go up to more than 3 million won a month if call fees during night rush hour rises to near 10,000 won,” said an unnamed industry official.

The Seoul government is separately mulling to up basic fare by more than 20 percent from current 3,800 won charged for a 2-kilometer ride. Surcharge during night peak could also be upped to 40 percent from current 20 percent. The new rates will likely be announced after a public hearing next month.

The move is expected to draw strong public backlash as it adds to spike in prices from groceries to service charges.

Whether price raise can help resolve the lack of supply is also questionable.

Platform operation industry noted that platform transportation businesses like Tada and Uber that have been ousted from the market should be able to return via ease in mobility-related regulations such as the revised passenger transport service act as a fundamental solution.

Under the passenger transport service act revised in 2020, car-sharing and ride-sharing operators like Tada, Uber, and Kakao Mobility are restricted from operations.

The government is carefully considering re-revising the passenger transport service act – not as a solution to resolve shortage in taxi drivers in the market but part of a measure to innovate mobility platform sector.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]