President Lee Myung-bak has vetoed a contentious bill, Tuesday, which would allow taxis to get state subsidies in vehicle and fuel purchases, and use the current bus-only lanes.
"Such a bill is unprecedented and I cannot sign it into law," Presidential spokesman Park Jeong-ha quoted Lee as saying. "There are a number of ways to normalize problems related to the taxi industry. The government will solve them by adopting these measures."
In response, the taxi drivers and operators vowed to go on strike as they threatened to previously. Since it was passed with bipartisan support, it can't be ruled out that the parties could muster a two-thirds quorum to override the veto.
The Cabinet, presided over by Prime Minister Kim Hwang-sik, asked the National Assembly to reconsider the bill, called "The Law on Fostering the Taxi Industry," a technical step for President Lee to override the bill.
The prime minister said the government will submit an alternative bill to the National Assembly.
This is the first time that President Lee has exercised his right to veto a bill passed by the National Assembly. Cheong Wa Dae explained the outgoing president was determined to block the "populist initiative."
The opposition parties were up in arms, being supported by taxi drivers who decided to wear black ribbons in protest.
Rep. Lee Hahn-koo, floor leader of the ruling Saenuri Party, also criticized Lee's move for ignoring the Assembly, but stopped short of saying the ruling party would vote for the measure again.
Lee noted his party would listen to the voices of people from all walks of life before making a decision.
The ruling party will hold a meeting of its members today to discuss the matter.
During a briefing, Lim Jong-yong, a minister at the Prime Minister's Office, noted taxis cannot be defined as public transportation by any set of standards.
"To be defined as public transportation, taxies should meet certain criterion, such as the capacity to carry many passengers at the same time, a set itinerary and time table," Lim said. "Support for public transportation was introduced to reduce traffic jams, pollution and other environmental damage and to save energy costs."
Lim said the bill, if it went into effect, would end up being a financial burden to both central and local governments, noting that local authorities are responsible for most of the financial support for public transportation.
If the bill takes effect, the government will need 1.9 trillion won every year to support the taxi industry.
During a meeting with senior Democratic United Party (DUP) members, floor leader Rep. Park Ki-choon said President Lee ignored the consensus on the bill in the political arena.
Park called Lee's veto a divisive act. He noted the DUP would push for parliamentary approval of the measure.