Individual taxis attracting retirees despite 'lottery'-level odds... Price per unit may rise over 100 million won

Number of Transfer Education Applicants Continues to Rise
Sales Hit a "Lean Season" Amid Sluggish Domestic Demand
License Plate Prices Reach 116 Million KRW

Amid the economic downturn, competition to apply for the 'transfer education' required to start a private taxi business has become fierce. This is interpreted as the growing popularity of private taxis, which offer higher stability compared to other industries since vehicle and license costs can be recovered.

Taxis are waiting for passengers at the taxi stand at Seoul Station. Photo by Jinhyung Kang aymsdream@

According to the Korea Transportation Safety Authority on the 20th, the number of applicants for private taxi transfer education has steadily increased since the lottery system was introduced in the third quarter of last year. The number of applicants was 6,569 in Q3 last year, 7,114 in Q4, and a whopping 7,656 applied for education in Q1 this year. Transfer education is mandatory training that individuals must complete before transferring a taxi license. Starting with a first-come, first-served registration method in 2021, the transfer education system changed to a lottery system, and among those preparing for private taxis, the competition rate has become so high that some say it is like a 'lottery.'

As competition for transfer education applications intensified, the authority made changes to the system. In April last year, they implemented a 'license transfer period reduction' policy. Previously, applicants had to purchase a taxi license within three years after passing the transfer education, but this period was shortened to one year. This was because even people without immediate plans to transfer a private taxi license were applying for the education, causing fierce competition for education reservations. Then, in December, the lottery method for transfer education was changed again. Benefits were given to those who had repeatedly applied but lost in the lottery due to the high number of applicants. The authority explained, "This was to partially resolve the situation where long-term repeated failures made it impossible to register for education."

Kim (65), a taxi driver who retired from a hotel job in Seoul, said, "There aren't many self-employment options after retirement, so taxis seem to have become more popular," adding, "The price of license plates might rise further." As of this day, Seoul private taxi license plates are traded at around 115 to 116 million KRW, about 10 million KRW higher than at the end of last year. Until 2023, private taxi license plates were traded below 100 million KRW, but since then, prices have consistently remained above 100 million KRW.

Despite the high demand for private taxis, drivers themselves are struggling. Retail sales, which indicate consumer spending, decreased by 2.2% last year, marking the largest drop in 21 years since 2003, reflecting sluggish domestic demand. Retail sales have declined for three consecutive years since 2022, the longest decrease since related statistics began.

Jung (67), waiting for passengers at a taxi stand near Mapo Station in Seoul, said, "Honestly, it feels harder than during COVID-19," adding, "In January, there was Lunar New Year, and then graduation and school entrance seasons overlapped, so people seem to have tightened their wallets." Park, a taxi driver in his 50s, said, "Even working the same hours as before, sales are far below average," and added, "I hope things get better after March."

Experts cite the approaching retirement of the baby boomer generation (born 1964?1974) and the relatively flexible nature of private taxi work as key factors behind the explosive popularity of private taxis. Professor Ha Jun-kyung of Hanyang University’s Department of Economics said, "Many baby boomers, who are not well-prepared for retirement, are retiring and need to support themselves, and self-employment is one way. Since the self-employment situation is not good, private taxis look better because the license can be resold." Professor Lee Jeong-hee of Chung-Ang University’s Department of Economics also said, "Private taxis have no age limit, so demand has increased in the aging society. Although the taxi industry situation is not good, the lack of suitable jobs amid the economic downturn has also had an impact."