[Regulatory Republic] Breaking Down Barriers to New Industries and Sharing Pain with Existing Sectors... A Look at Overseas Cases

<3·End>Cases of Overseas Regulatory Reforms
Uber Service Still Banned in Korea...Taxi Hailing Service, Not Vehicle Sharing
Uber Legalized in Finland with Removal of Existing Taxi License Quotas and Fare Deregulation
Australia Supports Taxi Industry by Charging Passengers $1 per Uber Ride to Fund Taxi Support
Telemedicine Market Temporarily Allowed in Korea...Fully Permitted in Japan, Covered by Health Insurance in France

[Asia Economy Reporter Haeyoung Kwon] Shared vehicles, delivery, accommodation, laundry, beauty, legal tech, ...

As information technology (IT) advances, new online-based platforms continue to clash with traditional industries. The elimination of Tada, a vehicle-sharing platform company, through the so-called 'Tada Ban Act' is pointed out as a clear example of Korea's regulatory omnipotence approach to this 'uncomfortable coexistence.' In a situation where the inevitable clash between new industries and traditional industries is forecasted due to the massive trend of industrial convergence, there is a growing call for the government to proactively remove entry barriers for new industries and seek conflict resolution structures that allow win-win outcomes with traditional industries to support corporate innovation.

◆ Finland Legalizes 'Uber' by Lifting Existing Taxi Regulations, Australia Shares Pain with Uber Users＝ Vehicle-sharing services represented by Uber involve providing transportation services to consumers using privately owned vehicles. Based on innovative technology, they offer benefits to consumers and profits to operators. The issue lies in legal fairness with taxi operators who operate under government-issued taxi licenses. Major countries overseas accept vehicle-sharing services within the regulatory framework and resolve conflicts by easing regulations and preparing support measures for existing industries. Instead of 'plus regulation' that builds new entry barriers for new industries, they adopt 'minus regulation' that relaxes regulations on existing industries.

The United States recognizes Uber as a new category of service called a 'network transportation company,' granting new qualifications while requiring additional conditions such as liability insurance and driver identity verification. In Helsinki, Finland, Uber services were legalized by abolishing the total quantity regulation on existing taxi licenses and liberalizing taxi fares. Australia accepted Uber into the regulatory system and focused on sharing the pain of existing industries caused by the emergence of new industries. They operated a system where Uber passengers pay 1 dollar for five years, creating a fund of 250 million dollars (about 300 billion KRW), which is used for consolation payments to taxi license holders and license purchases to support the existing taxi industry.

Meanwhile, Uber services are still banned in Korea. Uber re-entered the domestic market under the name 'Wooty' in partnership with SK Telecom, but it only provides taxi-hailing services, not vehicle-sharing services.

The Korea Institute for Industrial Economics and Trade stated, "If the entry of innovative companies into new industries is restricted by regulations, not only is business promotion difficult, but efforts for innovation activities are negatively affected. Under the domestic regulatory environment, there is a strong argument that many global startups are likely illegal, making new entry difficult. Therefore, regulations blocking new industry entry need to be promptly improved."

◆ While Remote Medical Care Booms Overseas, Domestic Approval is 'Temporary'＝ Although regulatory barriers block progress domestically, remote medical care is another field where countries like the United States, Japan, and France actively ease regulations. Major countries overseas have been actively fostering the remote medical care market by applying health insurance even before the COVID-19 outbreak.

In the United States, remote medical care has been implemented since the 1990s, and currently, one in six medical consultations is conducted remotely. Japan started remote medical care in 1997 for residents in remote islands and mountainous areas and fully legalized remote medical care in August 2015. France has been conducting government-led remote medical care pilot projects since 2014, legalized it in 2018, and simultaneously applied health insurance coverage. According to KOTRA, the cost of remote medical services in France is about 26 euros (approximately 35,000 KRW) for general practitioner consultations and 28 euros (about 38,000 KRW) for specialist consultations.

In contrast, remote medical care in Korea was temporarily allowed after the COVID-19 outbreak but remains 'time-limited.' Korean big tech company Naver is turning its eyes to overseas remote medical markets. In 2020, through its subsidiary Line, it started a remote medical service in Japan that handles hospital search, reservation, consultation, and payment via a smartphone application. The plan is to expand remote medical services from Tokyo to all over Japan.

Some express concerns that if the Korean government lags in regulatory easing in the globally expanding remote medical market, only Korean citizens will miss out on benefits, and the domestic market may be ceded to foreign companies in the promising global remote medical market. According to U.S. market research firm Grand View Research, the global remote medical market size is expected to grow at an average annual rate of 22.4% from 2020, when COVID-19 occurred, reaching 298.9 billion dollars (about 357 trillion KRW) by 2028.

Yoo Hwan-ik, head of the Corporate Policy Office at the Federation of Korean Industries, said, "With the current regulation-centered approach, new future growth engines cannot emerge in Korea. If the government does not shift to a post-regulation approach amid accelerating industrial convergence, it may ultimately result in ceding our market to foreign platform companies in this borderless era."