[New Transportation Refugee Report] ⑦ Switched to Vans... Village Buses Running at a Loss

After COVID-19, Reduced Service and Longer Intervals Lead to Declining Ridership
Alternative Transportation Options Like Kickboards on the Rise

The 'Jungnang01' village bus, which runs between Junghwa-dong in Jungnang-gu, Seoul and Sinimun Station, switched its vehicles to Staria vans last year. This was due to operating losses.

However, escaping the deficit remains a distant goal. A representative from the route operator, Yaksu Transportation, stated, "We can't even cover labor costs."

Many point out that, just as the light rail caused inconvenience to citizens due to failed demand forecasts, village buses are also failing to fulfill their role because they cannot resolve their financial problems. Village bus ridership has not recovered since it plummeted during the COVID-19 pandemic.

According to the village bus association, the average daily number of passengers dropped from 1.17 million in 2019 to 840,000 last year. This decline is due to an increase in alternative transportation options such as subways and light rail, as well as the expanded use of personal mobility devices (PM) like kickboards and shared bicycles.

‘Jungnang01’ Staria village bus operating in front of Sinimun Station. Photo by Jinju Han

In an effort to reduce costs, transportation companies had no choice but to decrease the number of trips, which in turn increased intervals between buses and led to a vicious cycle of passengers turning away. Village bus operators are also facing difficulties in recruiting drivers. The starting annual salary for a village bus driver is in the 33 million won range, which is much lower than that of city bus drivers (54 million won), and welfare benefits are also poor. As a result, the village bus driver position is perceived as a temporary job that drivers take before moving on to become city bus drivers.

As financial difficulties worsened, the association demanded increased government support in May by threatening to suspend village bus operations. They are even considering withdrawing from the public transportation transfer system. Although the village bus fare is 1,200 won, most passengers transfer from other modes of transport, so the bus company receives only about half of the fare. When passengers transfer to the subway, the village bus company receives only 646 won; when transferring to another bus, they receive 667 won. If a passenger uses both city bus and subway, the company receives only 439 won.

This is why there are calls for the standard transportation cost (the basis for financial support) for village buses to be adjusted to reflect actual costs. The association claims this amount is only about 30% of the actual input cost and is significantly lower than that for city buses. As of June last year, the standard amount was 486,098 won, only a 12% increase from 2018 (433,020 won). In contrast, for city buses, the standard amount in 2023 (846,339 won) was a 23% increase from 2018 (687,194 won).

Interior view of the ‘Jungnang01’ Staria village bus operating in front of Sinimun Station. Photo by Jinju Han

Interior view of the ‘Jungnang01’ Staria village bus operating in front of Sinimun Station. Photo by Jinju Han

The Seoul Metropolitan Government is also deeply concerned. Despite increasing subsidies, the operation rate continues to decline. The city stated, "We raised fares in 2023, and some operators are even making a profit, so it is difficult to accept continuous demands for increased subsidies."

An official from the Bus Policy Division said, "If we raise the standard support amount, even profitable operators will receive subsidies. Since companies receive support even if they reduce service or simply maintain current levels, they tend to focus solely on collecting subsidies."

Kim Jinyu, a professor at Kyonggi University, said, "For elderly residents living in hilly areas, it will become difficult to go out if village buses disappear. Introducing a partial quasi-public operation system for essential routes could be considered as a solution."