Seoul Legalizes Taxi Ride-Sharing for the First Time in 40 Years... Pay Half Price if Routes Are Similar

Taxi Development Act Amendment Takes Effect Allowing Ride-Sharing from the 28th
Ride-Sharing Permitted Only When Called via Mobile App
Matching Passengers with Similar Routes to Share Costs
2019 Regulatory Sandbox 'Banban Taxi' Pilot Operation

[Asia Economy Reporter Han Jinju] Taxi ride-sharing will be allowed in Seoul for the first time in 40 years. People with similar routes will be matched through a mobile application to enable 'shared rides,' allowing passengers to travel to their desired destinations at a lower fare.

On the 27th, Seoul City announced that, following the enforcement of the revised Taxi Development Act in July last year, taxi ride-sharing services will be legalized starting from the 28th. The scope of permitted taxi ride-sharing is limited to cases where taxis are called via mobile apps. Platform franchise operators or platform brokerage operators will be able to develop and operate taxi ride-sharing services.

Taxi ride-sharing was banned by law in 1982 after disputes arose over fare calculations when drivers chose passengers to share rides without the passengers' consent. Since then, there have been calls to allow shared rides as a solution to alleviate late-night ride shortages. In 2019, the ride-sharing taxi platform 'BanBan Taxi' was selected for the Ministry of Science and ICT's regulatory sandbox and was pilot-operated in some areas of Seoul.

Taxi ride-sharing works by automatically matching passengers with similar routes when called through an app. Since fares are split among the shared passengers, the cost is about half compared to riding alone. From the taxi driver's perspective, picking up two passengers at once increases income. This service is similar to the 'Uber Pool' or 'Lyft Line' services operated in the United States.

Currently, the only service that allows ride-sharing is 'BanBan Taxi.' During the pilot operation period, selecting 'shared ride call' automatically matched vehicles with a 70% route overlap. To address concerns about crime exposure when riding with strangers, users must register with their real names and use a credit card in their own name as the payment method. Additionally, ride-sharing was only permitted among passengers of the same gender.

Seoul City expects that allowing ride-sharing services will efficiently utilize limited taxi resources and contribute to alleviating ride shortages and expanding passenger convenience. The city plans to support various operators in developing ride-sharing services.

Baek Ho, Director of Urban Transportation at Seoul City, said, "Voluntary taxi ride-sharing will be a starting point for IT technology to solve taxi problems," adding, "We expect it to help alleviate Seoul's representative taxi issue of late-night ride shortages and increase taxi operators' income. We will strive to create an environment where platform operators can apply IT technology to revitalize the taxi industry."