How can Korea's taxi shortage be resolved?

A photo showing cabs parked outside a taxi company in Busan / Korea Times file

By Kim Bo-eun

The shortage of cabs across the country continues to cause inconveniences, and the government and businesses have been struggling to come up with solutions.

The dive in the number of operating taxis was driven by the COVID-19 pandemic, which prompted many drivers to leave the taxi-driving business amid a plunge in demand for ride services.

"Younger drivers flocked to delivery or chauffeur services, as they sought better paying jobs," Lee Hyun-ro, at the Federation of Korean Taxi Workers' Unions, said.

Data from the National Joint Conference of Taxi Associations shows there were a total of 230,598 taxis registered nationwide as of June, which is down 6 percent from the number that were registered in January 2019 prior to the start of the pandemic.

It was mostly drivers affiliated with taxi companies who left their jobs, compared to drivers operating with their own business licenses, the majority of which continued working. The number of drivers affiliated with taxi companies stood at 74,571 as of June, down 28.8 percent from January 2019.

Consumers have mainly experienced difficulty in securing cab rides at night, given the spike in demand after public transportation stops running.

"The crux of the problem is pay. Drivers will only return if they are guaranteed better compensation," Lee said.

The discussion is now about how to raise the pay for cab drivers and who will bear the burden of the costs of the pay hike.

Given that circumstances are tough for taxi companies, due to the rise in costs of operating the vehicles, cab drivers state that a flexible fare system would be one way to address the issue. Under a flexible fare system, passengers who demand cab services pay extra to secure their ride.

This system is also a means proposed by the transport ministry, but progress has stalled, as local governments have been reluctant to introduce the system due to fears of a backlash from consumers. Local governments are the entities in charge of setting the fare systems for taxis.

"The fare system under the status quo is burdened by too many regulations," Ahn Ki-jung, a research fellow in the Seoul Institute's department of transportation systems research, said.

"The system should be fixed so that fares are paid according to the principle of demand and supply," Ahn said.

Another way is for taxi drivers to earn an extra call charge for being connected to passengers, that passengers pay, Lee said. Under the status quo, cab businesses and platform companies share the fee with drivers.

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