Policymakers pledge drastic regulation for mobility platform operators

By Lim Chang-won Posted : July 17, 2019, 14:00 Updated : July 17, 2019, 14:00

[Courtesy of VCNC]

SEOUL -- South Korean policymakers proposed drastic deregulation for ride-sharing and car-hailing services, which have been stagnant due to strong objection by taxi drivers, vowing to achieve connected mobility and stability in the country's troubled taxi industry together for shared growth.

The Ministry of Land, Infrastructure and Transport Ministry said Wednesday that mobility platform operators should distribute earnings to create a state-managed fund, which will be used to address oversupply in the taxi industry and enhance the welfare of taxi drivers.

"We will provide an institutional space for innovative attempts and service competition among various platform companies," Vice Minister Kim Kyung-wook told reporters after a policy coordination meeting involving senior economic officials and ruling party policy planners.

"Through drastic deregulation and improvement of the system, we will lay the foundation for advancing the existing taxi industry and competing equally and fairly with platforms," Kim said, describing innovative growth and co-prosperity as "the challenges of our time in the face of the 4th Industrial Revolution."

Licenses will be given to various platform operators, based on a compromise reached in March to resolve conflicts between new platform operators and taxi drivers, Kim said. "As actual customers want a variety of types and advanced services that existing taxies cannot supply, we believe that this will create a new market rather than undermine the existing taxi market."

Cho Jung-sik, the chief policymaker of the ruling Democratic Party, said the goal is to create a win-win system for new platform operators and the taxi industry. "We will allow platform operators to provide diverse and innovative transportation services while returning their proceeds to the industry and society so that platform operators and taxi companies can coexist."

Taxi drivers have complained about low income, excessive work and poor working conditions. Government data showed that there are more than 250,000 taxis in South Korea with drivers in Seoul working for an average of 12 hours a day and earning an average of about 2.1 million won ($1,780) a month.

A ride-hailing service, which was to be launched by South Korea's web service giant Kakao in December last year, sparked strong protests by taxi drivers. Two drivers died in self-immolation. After months of tough negotiations, taxi drivers agreed in March this year to approve Kakao's mobility app just at rush hours in return for better pay and improved working conditions.
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