Seoul, Busan grapple with rising costs of seniors' free subway rides

An older adult checks a subway map inside Kkachisan Station on Seoul Metro Line 5 and Line 2 in this 2023 photo. Korea Times photo by Jang Soo-hyun

Seoul and Busan are facing mounting financial pressure from providing free subway rides to designated groups, raising concerns about the long-term sustainability of local governments' operation of the critical public transit system.

The service, introduced in 1984 for people aged 65 or older, has now accumulated losses worth hundreds of billions of won for subway operators. While the ministries responsible for the laws underpinning the program have remained largely aloof to the growing financial strain, the only immediate relief in sight is a bill pending before a National Assembly standing committee.

The losses are staggering, and as the population ages, the number of people who benefit from the service grows, fueling the problem.

Seoul Metro, under the Seoul Metropolitan Government, operates subway lines 1 through 8 across Seoul, Incheon and Gyeonggi Province. Last year alone, it saw an operational deficit of 450 billion won ($290 million) from free rides, according to the National Assembly Research Service (NARS). That figure accounted for 54 percent of the company’s entire deficit that year.

Busan Transportation Corp., which operates the city's subway system for Busan Metropolitan City, saw its deficit caused by the free rides reach 185 billion won in 2025. That was 87 percent of the company’s net loss that year.

Both companies’ accumulated debts are astronomical. Borrowings of Seoul Metro as of the end of last year reached 4.5 trillion won and Busan Transportation Corp. 1.3 trillion won. NARS said both figures have already crossed a line of safety for debt management standards set by the Ministry of Public Administration and Security.

Because the subway systems are run by the city governments, financing operations is their responsibility. But these spiraling debts demonstrate the cities have lost control of the problem.

Subway passes for different age groups are outlined on a poster inside Jongno 3-ga Station in Seoul, May 12. Yonhap

This is where city subways differ from nationwide railway operators like KTX high-speed trains. Korea Railroad Corp. (KORAIL), a state-run railway operator, is funded by the Ministry of Land, Infrastructure and Transport, which offsets any deficits and ensures the system remains financially healthy in accordance with the country’s Framework Act on Railroad Industry Development.

There is no legal basis for providing a similar safety net to subway systems.

“In New York, Tokyo, London, Berlin and Paris, free riders must pass qualification conditions in terms of level of income, duration of time of use and age limits. It is hard to find a country that provides a subway welfare system like Korea,” said Ku Sae-ju, a legislative researcher at NARS.

Ministries overseeing the relevant laws have so far remained uninvolved in proposing solutions for the issue. The Metropolitan Transport Commission (MTC) under the transport ministry, which oversees public transit in major cities, said the matter is “so large and complex that it is difficult to present a clear position.”

“We haven’t reached any internal consensus regarding the issue,” said an official from the MTC’s metropolitan transport infrastructure and operations bureau. "A proposal to revise the country’s Urban Railroad Act to offset deficits for metro subways is now awaiting passage at the National Assembly’s standing committee. Even if it passes, it remains to be seen whether the country’s budget ministry will allocate the deficit-dissolving fund to the transport ministry or the welfare ministry."

A revision to the enforcement decree for the Urban Railroad Act, replacing the transport ministry with the MTC for oversight, came into effect on Tuesday.

The official added, “I heard the budget ministry is rather reluctant to make that allocation. There were even arguments about the logic of using a national fund for local government affairs like subway operations.”

Kim Tae-byeong, director general for Railway Policy at the transport ministry, said the ministry already supported local governments by funding 40 percent of subway infrastructure construction costs for Seoul Metro and 60 percent for other metropolitan cities.

The Ministry of Health and Welfare, which oversees the enforcement of the Welfare of Senior Citizens Act, said that the free ride service is entirely the responsibility of local governments.

Seoul Mayor Oh Se-hoon pledges to improve Seoul Metro's public transit quality by expanding its network to more areas outside Seoul at his reelection campaign office in Seoul, May 26. Yonhap

“The law states the service should be provided in accordance with a local authority’s capacity, whether for free or with a discounted price. The operation is entirely up to local governments,” said an official from the ministry’s senior policy division.

“Unless there is a need to revise the Welfare of Senior Citizens Act, the current laws allow local governments to handle subway affairs on their own.”

The only immediate solution appears to be a revision to the Urban Railroad Act, which is now awaiting passage at the National Assembly’s Land Infrastructure and Transport Committee. The revised law would require the central government to cover deficits incurred by metro operators. Seoul Metro said the revision would correct an “unfair structural disadvantage” faced by transit operators under the country’s public service obligation regulations.

“While specific methods of restitution remain to be discussed, the revision will at least introduce a legal foothold mandating the central government to cover subway-driven city deficits,” Ku said.

Raising subway fares is another option, but it cannot be solely decided by local municipalities or mayors because the subway lines cross areas controlled by several local governments, as well as being a concern of the budget ministry.

“Metro subways operate across Seoul, Incheon and Gyeonggi Province, so fare hikes must involve consent from those local authorities. The ministry could also pressure city governments to refrain from raising the fares for fear of disrupting market prices,” Ku said.

“The central government is also at fault because none of the ministries have stepped forward to resolve the issue, including the transport ministry, which oversees the Urban Railroad Act. The welfare ministry is managing the Welfare of Senior Citizens Act and is distancing itself from the issue.”

A man waits for a bus at the Seoul Bus Transfer Center in front of Seoul Station, June 24. Yonhap

The Seoul city government said last month that it is considering raising the minimum age for free subway rides to 70 to reduce the deficit, saying the money could instead fund free city bus rides for those aged 70 or older.

The plan was first proposed by the Korea Senior Citizens Association's Seoul Chapter. The Seoul City Council took up the proposal and passed an ordinance on June 24 to reimburse bus fares for people aged 70 or older for up to 14 rides per month. The council supported the idea since older adults use the bus more often than the subway.

The city government said it will hold public discussions with the association before finalizing the free bus ride program.

The city government's Transportation Policy Division Director Kim Jae-kwon said raising the minimum age for free subway rides will involve public consent and agreements with the transport and welfare ministries before being finalized.

"The country's legal minimum age to be a senior is 65, and the Welfare for Senior Citizens Act allows any age group above 65 to be a beneficiary. Therefore, raising the age condition to 70 is legally okay," Kim said.

"Although Seoul Metro is a Seoul City business, the company operates stations that offer a transfer to lines run by KORAIL, so we require the transport ministry's support for this change of system."

Kim said the city government is closely watching the case of Daegu, where the city's subway operator, DTRO, raised the minimum eligibility age for free subway rides to 68 earlier this year.


"Daegu ultimately aims to raise the minimum eligibility age for free subway rides to 70, and it has been moving toward that goal step by step," he said. "The city's approach has provided a useful reference for us."