Car-sharing services pounce on rising fares

Amid rising public transportation fares and soaring interest rates for new car purchases, the car-sharing industry is trying to give people something to smile about with some timely promotions.

Cars operated by Socar, a car-sharing platform, parked at a Socar zone, or a designated parking area, in Seoul on Nov. 20, 2022. [YONHAP]

Amid rising public transportation fares and soaring interest rates for new car purchases, the car-sharing industry is trying to give people something to smile about with some timely promotions.

Powered largely by mobile apps, car-sharing services allow members to rent vehicles when they need them and only for as long as they need them, often on an hourly basis.

The basic taxi fare in Seoul rose to 4,800 won ($3.85) from Feb. 1, up 1,000 won from the previous fare.

In addition to the taxi fare hike, the distance covered by basic fares was shortened from 2 kilometers to 1.6 kilometers.

After the base fare, 100 won is charged for every 131 meters, up from the previous 132 meters, or every 30 seconds, up from the previous 31 seconds.

This means that a passenger taking a cab at midnight to travel 10 kilometers, roughly from Myeong-dong, central Seoul, to Gangnam, southern Seoul, will pay 17,700 won. Prior to the fare hike, the trip would have cost 13,700 won.

Seoul Metropolitan Government plans to hike bus and metro fares by some 400 won as well.

Car-sharing services are trying to take advantage of the market opportunity offered by the rising transportation costs.

Socar, a unicorn mobility startup, began its “Commuter Coupon Book” promotion on Feb. 1. The promotion lets Socar members rent vehicles parked in designated Socar zones between 5 p.m. and 11 a.m. the next day — peak commuting hours — for just 9,900 won per rent.

That compares very favorably with, say, a commuter taxi ride from Bundang, Gyeonggi to Gwanghwamun, central Seoul, which would cost about 25,000 won.

Kim Mi-roo, Socar’s head of marketing, said this promotion “lightens the burden of annually rising transportation fees.”

Another car-sharing platform, People Car, is raffling car rentals and gift certificates for a five-star hotel restaurant to new members who join between Feb. 1 and Feb. 19.

The company is also offering a 50 percent discount coupon and an hour discount voucher to everyone who signs up for the raffle.

Deregulation may put a bit of gas into the car-sharing industry's tank, too.

The Fair Trade Commission announced on Nov. 24 of last year that car-sharing companies could expand their scope of operations from the first half of this year.

Previously, car-sharing companies could only rent cars to round-trip users or hire drivers to return cars to their original location.

“A 20 percent increase in interest rates for car loans has made it difficult for younger people to buy cars,” said Kim Pil-soo, who teaches automotive engineering at Daelim University. “As public transportation fares rise, the demand for car-sharing, which is easy to book with smartphones, will increase as well.”

BY KIM MIN-SANG, SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]