Taxi fare surges most since Asian financial crisis

Taxi fares have experienced their most significant on-year surge since the 1997 Asian financial crisis, causing commuters like Kim Jung-ah, an office worker in Gangnam, Seoul, to feel the financial strain.

Kim, who currently has a cast on her leg, relies on taxis for her daily commute to work, a journey that typically takes 10 to 15 minutes.

“I spend around 8,000 to 9,000 won just for the short 10-minute ride to my office,” Kim said. "If I had the option, I'd seriously consider choosing to walk instead."

According to Statistics Korea on Wednesday, the taxi fare index, which measures the average price of a taxi ride, rose by 19.1 percent on-year to 120.19 in August, marking the most substantial increase in over two decades.

This is the largest on-year increase since January 1999, when taxi fares skyrocketed by 21 percent on-year during the Asian financial crisis.

The sharp rise in taxi prices is part of a broader trend of rising public service prices, which have also been boosted by significant hikes in bus fares.

The steady trajectory of taxi fare increases, which had previously remained relatively static, gained momentum from December last year when it saw a 1.5 percent on-year increase.

The surge in December can be attributed to the introduction of higher nighttime surcharges for taxis in Seoul and North Chungcheong Province.

"The consistent increase in taxi fares across various regions since last year has been a driving force behind the significant rise in the taxi fare index,” a Statistics Korea official said.

The upward trend continued into January of this year, with taxi fares in Ulsan and Daegu seeing increases.

In February, the basic taxi fare in Seoul also underwent an adjustment.

At the time, the Seoul Private Taxi Association said in a statement the price hike was inevitable and meant to "overcome the plight of the taxi operation due to rising fuel costs and the COVID-19 pandemic."

In the capital city, the initial charge for ordinary taxis covering the first 1.6 kilometers is now fixed at 4,800 won ($3.90), representing a notable 26.3 percent increase from the previous rate of 3,800 won, which had been in place for the first 2 kilometers for the past four years.

The escalation in taxi fares further extended across various regions, including Busan and South Gyeongsang Province in June, Incheon, Gwangju, Daejeon, and Gyeonggi Province in July, and North Chungcheong Province, North Jeolla Province and North Gyeongsang Province in August.

Bus fares also rose sharply in August, up 8.1 percent on-year for city buses and 10.2 percent for intercity buses. These are the largest on-year increases since June 2016 (9.3 percent) and February 2020 (11.4 percent), respectively.

The government explained that the recent uptick in public transit prices, including buses, was implemented mainly to mitigate financial losses incurred by the public transportation infrastructure.

The combined rise in bus and taxi fares contributed to a 1.7 percent on-year increase in public service prices last month. This marks the most substantial surge in 22 months since October 2021, when there was a 6.1 percent increase.

This year, the public service price index had initially stayed under 1 percent until February, but it experienced a 1.2 percent increase in March. From July, when it witnessed another 1.2 percent on-year rise, the rate of increase continued to expand.

By Song Seung-hyun(ssh@heraldcorp.com)