ED Taxi fare hike

Time to be more proactive toward innovation, new industries

The Seoul Metropolitan Government has announced plans to raise taxi fares to help alleviate the chronic taxi shortage at night. The basic taxi fare is expected to rise from the current 3,800 won ($2.80) for the first 2 kilometers to 4,800 won for 1.6 kilometers. The taxi meter will also rise faster, with the fare increasing by 100 won for either 131 meters or 30 seconds, compared with the current 100 won per 132 meters or 31 seconds.

The late-night premium rate is likely to change, too. Currently, taxis in Seoul charge 20 percent more for rides between midnight and 4 a.m. The new measures, however, will enable cabs to charge 20 percent to 40 percent more for late-night rides, with the premium-rate time bracket set to start two hours earlier. Taken together, Seoul's taxi fares are expected to soar by about 30 percent.

However, skeptics claim that the fare hike alone will do little to ease the taxi shortage and only result in a greater financial burden on the part of passengers. It's no secret that the government's policy failures are to blame for the current battle to get a cab every night on Seoul's streets.

As ridership plummeted during the coronavirus pandemic, many taxi drivers left for other sectors like food delivery. Furthermore, private taxi drivers, who are usually elderly and account for about two-thirds of the total drivers, have been reluctant to work late at night.

However, the government succumbed to vested interests, labeling Uber illegal in 2013 and banning Korean mobility firm Tada in 2020. The ban left the industry reliant on traditional taxis, suggesting that when licensed drivers left, there was no one to fill the vacuum. Easing the taxi shortage by raising fares is only a stopgap measure. What's needed first is for the government, which had nipped mobility innovation in the bud, to correct its blunders, although belatedly. More fundamentally, it's imperative for the government to be more proactive toward new industries and innovation.