"Let's Get Out Before It Blows Up"... Seoul Private Taxi Welfare Fund Faces Bankruptcy Crisis Amid Aging Membership

Unpaid Obligations Exceed 141.5 Billion Won
Membership Drops by Over 4,000 in One Year

A taxi operating near Gangnam Station in Gangnam-gu, Seoul. The photo is not related to the specific content of the article.

As the Seoul Private Taxi Association Welfare Fund faces the risk of bankruptcy, a growing number of anxious members are leaving the organization.

According to a compilation of reports by The Asia Business Daily on January 22, the number of members in the Seoul Private Taxi Association Welfare Fund dropped by more than 4,000, from 37,508 in January last year to 33,159 in December. This decline is the result of both drivers retiring each month and members withdrawing from the welfare fund.

The welfare fund operates similarly to a rotating savings group, where taxi driver members contribute a fixed amount each month, and drivers who retire receive severance support payments. However, due to an aging membership, the number of people eligible to receive payments has increased, while the number of contributors has decreased, leading experts to conclude that the fund is effectively on the brink of bankruptcy.

As of the end of last year, unpaid severance payments and refund allocations owed to withdrawn members exceeded 141.5 billion won. The amount of unpaid funds surpassed 100 billion won in May last year, and an additional 40 billion won accumulated over the following seven months.

The total monthly dues paid by drivers used to amount to about 2.5 billion won, but this has now dropped to around 2.3 billion won. As the inflow of funds decreases and the amount owed grows exponentially, the fund's financial health is expected to deteriorate further.

With the worsening financial health of the welfare fund, the number of new drivers joining the private taxi association has also declined. As of December last year, there were 48,023 members of the Seoul Private Taxi Association, with 848 drivers classified as non-members. Among them, 778 were first-time non-members. The increase in drivers choosing not to join the association from the outset is attributed to the association's bylaws, which require mandatory enrollment in the welfare fund upon joining the association.

In response, the association has launched a Welfare Fund Task Force (TF) to discuss ways to increase the fund's membership rate and secure its financial stability. Among the options being considered is the sale of assets such as the Magok charging station and the Yangcheon branch building owned by the association. However, some predict that even this would have minimal impact, as changes in usage would be required for the sale, and after deducting capital gains tax and outstanding loans, little would remain. Other measures under consideration include capping the additional points awarded to long-term members and implementing various other strategies.

Taxi drivers remain skeptical that any measures proposed by the association will resolve the current crisis. Driver A commented, "The monthly deficit keeps growing, and now it's said to be increasing by more than 4 billion won each month. No matter what buildings are sold or what is done, this problem cannot be fundamentally solved."

In response, a welfare fund official explained, "The welfare fund, which began as a social club, saw a surge in eligible recipients due to the easing of private taxi licensing requirements. To reduce the burden on existing members, monthly dues were lowered from 100,000-150,000 won to below 67,000 won, which led to the accumulation of unpaid amounts. The task force is currently discussing solutions to this issue."