Solutions sought for late night taxi shortage

People line up for taxis at the Seocho District Express Bus Terminal in southern Seoul on Thursday. The demand for taxis has increased significantly since the end of social distancing measures, creating a shortage. [NEWS1]

To deal with Korea’s worsening taxi shortage, the government is considering lifting restrictions on operating at night and adopting a new system for matching taxis and passengers.

The measures were mentioned in a report from the Ministry of Lands, Infrastructure and Transport delivered to the president on July 18, the ministry said on Monday.

The Ministry of Transport had announced that it would apply a flexible pricing system to taxis operating from 10 p.m. to 2 a.m. to solve the shortage of night taxis. A premium of 25 to 100% on the tariffs would be considered.

Along with premium fares, the government is considering scrapping the three-shift system for private taxis altogether – which required drivers to take time off every three days, further exacerbating the taxi shortage.

The Seoul city government has temporarily lifted the three-shift system since April 20 to allow private taxis to operate from 9 p.m. to 4 a.m. on rest days. But seeing people’s continued difficulty in finding taxis at night, the government is considering scrapping the shift system altogether.

Measures to prevent drivers from choosing lucrative fares and turning away from less lucrative fares, which is seen as an aggravating factor in the shortage of night taxis, are also being discussed.

A method of automatically assigning a passenger to a taxi — without the driver knowing the destination — is being studied.

Currently, Type 2 rated taxis – operated by a franchise taxi business such as Kakao T Blue and Macaron Taxi – are operated in this manner.

However, about 250,000 taxis registered in Korea are classified as Type 3 or operated by agent services, the largest group. Type 3 is a form in which mobility platform operators only act as intermediaries between drivers and passengers.

Once an automatic allocation system is applied to Type 3 taxis in addition to a late night bonus, the government believes it can prevent drivers from refusing to take fares.

Another option being considered by the Department of Transport is to relax restrictions on Type 1 taxis like TADA, which are technically rental cars.

Type 1 taxi rig operators can do business without a taxi license, but must pay 5% of sales to the government as a social contribution and can only operate 420 vehicles.

In order to boost the supply of taxis, the ministry plans to lower social security charges or increase the number of vehicles that can circulate.


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