[Report] "It's Not About the Fare" Will Taxi Drivers Return After Deliveries?

Government and Ministry of Land, Infrastructure and Transport Announce 'Late-Night Taxi Shortage Relief Measures'
Increase Late-Night Taxi Call Fees to Improve Drivers' Working Conditions
Taxi Drivers Met On Site Say "Delivery Jobs Still Earn More"

The government announced a 'Late-night Taxi Shortage Relief Plan,' but taxi drivers have shown lukewarm reactions. According to the policy, drivers can earn about 400,000 won more per month, but in reality, it is considered difficult by the drivers. Photo by Han Seung-gon hsg@asiae.co.kr

[Asia Economy Reporter Han Seung-gon] "No, there's nothing left," "Everyone went out for delivery, who would drive a taxi?"

Although the government announced the 'Late-night Taxi Shortage Relief Measures' on the 4th, taxi drivers met that afternoon expressed mostly negative views such as "It cannot be a solution" and "More sophisticated policies are needed." The taxi industry is asking for more attention to improving working conditions. The government stated that it will refine the policy after its implementation.

Mr. Kim, a taxi driver with 40 years of experience who said he is 80 years old, met in the Gangbuk area of Seoul, bluntly said, "It's not about raising taxi fares, but first, the number of drivers has decreased, and will those who left to work as delivery drivers come back? That's what I'm saying." During the interview inside the taxi, he raised his voice as if determined, acknowledging the government's efforts but expressing disappointment regarding effectiveness.

The Ministry of Land, Infrastructure and Transport decided to raise the call fee up to 5,000 won to solve the late-night taxi shortage. Currently, the platform companies take half of the call fee, and the rest is shared between taxi corporations or drivers. However, about 90% of the increase will be allocated to the drivers. It is estimated that this will increase income by about 400,000 won per month for those operating taxis at night.

However, to prevent refusal of rides, if the call fee is charged, the destination will not be displayed or passengers will be forcibly assigned. Also, part-time taxi work allowed only on Fridays or nights when passengers are crowded, and the mandatory rest day system will be lifted. The government expects these measures to increase the number of late-night taxis in Seoul by about 3,000.

The day after the full lifting of social distancing measures for COVID-19 prevention, past midnight on May 19, citizens were standing near Gangnam Station in Seoul trying to catch a taxi.
[Image source=Yonhap News]

◆ "Even though there seem to be many night customers... from the drivers' perspective, it's insufficient, delivery earns more anyway"

However, drivers point out that the 400,000 won increase in income is unrealistic. Taxi driver Mr. Kim said, "If you work a day, you can earn over a hundred thousand won. Out of that, you pay a certain amount to the company as a fixed fee, so you don't have much left in hand. The problem arises here. To earn more, you have to keep driving, but if you work a full 8 hours a day, you have to sleep to live, right?" He raised his voice. Then he added, "Let's say you come out to work at night after the late-night taxi shortage relief measures. Am I the only one working? Are there many night customers? Are there long-distance customers every day? This is reality, reality. Few drivers think they can hold 400,000 won in their hands," he lamented.

Regarding so-called 'taxi drivers who switched to delivery work,' he said, "People who used to drive as their profession can earn more doing delivery, so who would hold the steering wheel again?" He asked rhetorically, "Do you know how many taxis are left in the garage now?" He emphasized, "I hope such things are analyzed and reflected in the policy."

Another taxi driver in his 40s also said, "There are many talks that delivery income is higher," and sighed, "Then naturally, they go to that side (delivery riders). This (taxi business) is so hard..."

According to the city, the number of corporate taxi licenses is currently 22,000, but the number of corporate taxi drivers is only about 20,000. Looking at the numbers alone, the number of drivers is less than the number of operating taxis. Also, among about 50,000 private taxis in the city, only about 12,000 are operating late at night. It is believed that many have moved to industries such as delivery agencies, designated drivers, and parcel delivery, which have higher profits.

The taxi industry is reportedly discussing improvements in working conditions. The National Taxi Transport Business Association Federation argues that the upper limit of the call fee should be increased further. An association official said, "We are requesting to expand the application of dynamic fares a bit more," and predicted, "Additional income from this policy will be able to go to taxi drivers." However, regarding 'drivers who moved to the delivery industry,' he explained, "For example, only 4 out of 10 taxis in a taxi company are operating."

Experts suggested that policies to improve taxi drivers' working conditions should be organically linked with other policies to produce positive effects. Professor Yoo Jung-hoon of Ajou University's Department of Transportation Systems Engineering said, "It is difficult to evaluate with just one policy," and added, "We need to look at the essence of the issue." He continued, "For example, if everything could be solved by raising taxi fares, then just raising fares would suffice. But this is not everything." He emphasized, "We need to compare policies, find a balance, and achieve synergy effects." Professor Yoo explained, "Still, it is positive that taxi-related policies are being reviewed like this now."

Taxi passengers are hailing taxis at night. [Image source=Yonhap News]

◆ Ministry of Land, Infrastructure and Transport: "To bring back drivers who left, fares will be adjusted again"

The government plans to continuously review improvements in the treatment of existing taxi drivers. On the afternoon of the 4th, Minister of Land, Infrastructure and Transport Won Hee-ryong appeared on SBS 8 News and said regarding the late-night taxi measures, "Whether corporate or private taxis, the absolute standard is to connect to the treatment of drivers who actually drive cars and pick up passengers at that time. The rest, we consider as issues related to improving the treatment of the public and drivers," and added, "We will not compromise on innovation of taxi or non-taxi systems this time due to vested interests or existing inertia."

Regarding the taxi fare increase plan, he explained, "Since it is urgent, we will give flexibility to the call fee to bring back drivers who left and analyze and disclose data strictly on how effective the increase was in getting drivers to come out at night and whether the fare level is acceptable to the public, then adjust again." Separately from the government's plan, Seoul City is pushing to raise the basic fare for medium-sized taxis from the current 3,800 won to 4,800 won and the late-night basic fare from 4,600 won to 5,300 won starting at the end of the year.