A quick fix can't fix the taxi shortage at night

For a long-term solution, authorities must widen the ride choices through deregulation and more mobility options.

The government took action to address the dire shortage of after-dark cabs. The extra charge to call up a late-night cab ride will go up to 5,000 won ($3.50) for franchised taxis and 4,000 won for non-franchised taxis from the current 3,000-won cap. The new call rate system will be on trial until the year-end.

Part-time driving during certain hours also will be allowed. Moonlighting and weekend work as a cab driver is also possible. Private taxi drivers will be freed from the mandate to take shifts or take a regular day off. Aspiring cab drivers will be given temporary licenses to fast-track procedures to go to work immediately.

Supply and demand has been seriously imbalanced in the taxi market. Since the lifting of social restrictions, after-work and night cab arrangements have normalized. But taxis are short because many of the drivers shifted to delivery jobs during the pandemic. According to the Ministry of Land, Infrastructure and Transport, drivers hired by taxi companies shrank 30 percent from 2019. Since many of them are aged, they tend to avoid driving during late hours to exacerbate the situation.

Finding a taxi during peak hours has become near impossible. The ratio of taxi arrival upon hail application is 20 percent at late hours. In other words, only one out of five calls can be accepted. For a ride of minimum 30 kilometers (18.6 miles), the success rate is 40 percent. But for a shorter ride of 5 to 15 kilometers, the call success stops at a mere 10 percent because many drivers prefer longer-distance calls at night.

The latest government action can help increase cab supplies. But it cannot be a fundamental solution. Consumer complaints over service could rise despite higher cost burden. Part-time or temporary drivers won’t likely be committed to offering a safe and comfortable ride, either. They could pick passengers and drive recklessly to earn more money during the short period at night. On the part of passengers’ it will be hard to differentiate if taxis are driven by a regular driver or a temporary driver.

For a long-term solution, authorities must widen the ride choices through deregulation and more mobility options. The government and the National Assembly have banned van-hailing services like Tada and have disallowed Uber servicing in Korea. Tada executives have been found not guilty in trials in two lower courts. But the service still remains outlawed. The taxi market alone should not be left closed. The government must come up with fundamental redesigning of passenger mobility services as soon as possible.