By Kim Jae-won
The government said Tuesday that it will reduce the number of taxis by up to 50,000 over the next five years to ease an oversupply and improve services. The number of taxies currently stands at about 255,000 nationwide.
The Cabinet approved the Taxi Improvement Bill for submission to the National Assembly, according to the Ministry of Land, Infrastructure and Transport.
“We will not issue new licenses for taxi drivers in oversupplied regions. We will also limit the number of taxis by region,” said the ministry in a statement.
However, the plan is expected to draw fierce protest from taxi operators who have pledged to fight it.
The plan has come amid taxi drivers rallying to press the government to offer them subsidies as it does to public transport service providers.
The government has so far refused to be cowed and proceeded with its reform plan aimed at guaranteeing drivers’ income by reducing the number of taxis.
The number of taxis grew by 24 percent between 1995-2010, but the overall number of passengers using taxi services plunged 23 percent over the cited period, according to the ministry.
This oversupply of taxis has continued to undermine the profitability of each cab, prompting taxi drivers to demand higher fares, which then led to a further drop in the number of passengers.
The government has repeatedly failed to reduce the number of cabs despite its best efforts. It had no way of compensating taxi drivers giving up their licenses, which were being traded at up to 70 million won ($62,000) each.
Under the proposed bill, the government plans to provide up to 13 million won in compensation for each license plate, and have the taxi industry shoulder the rest of the cost by giving up government subsidies.
The move, however, has already been opposed by three of four major associations of taxi drivers.
The National Assembly earlier sought to designate taxis as public transportation, which would have entitled them to various government support currently offered to other public transportation services, such as bus and subway companies. The move was rejected by former president Lee Myung-bak.