By Kwon Mee-yoo
Staff Reporter
A Seoul court ruled in favor of taxi companies hiring drivers without proper contracts, a group blamed for speeding, reckless driving and various other crimes.
The court ruled against local government regulations banning taxi companies from hiring drivers under such irregular contract systems. Companies have hired the drivers without putting them on the regular payroll, a scheme to cut costs.
The Seoul High Court ruled Monday that a taxi company won its suit against the Yangcheon District Office.
However, it did not accept the company’s request that the district office should annul the suspension of its service for 60 days as a penalty for disobeying an order to stop hiring contract drivers.
The taxi company insisted that the ordinances issued by city and district governments ran counter to recent deregulation laws, a claim that was accepted by the court.
“The defendant made the order based on the Passenger Transport Service Act, but the Special Law on deregulation has priority over the act and thus the order is void,” the court said. “Even if the order was made before the Special Law, now the measure is in operation and the order has lost its effect.”
Under the contract taxi system, a taxi company can sign contracts with individual taxi drivers on the condition that the drivers pay a certain percentage of their income to the companies.
Currently, the contracting of taxis is illegal because contracted drivers operate taxis registered to the company without signing proper labor contracts with them.
The system was criticized for causing speeding, reckless driving and aggravating the working conditions of taxi drivers.
In August 2007, two contracted taxi drivers kidnapped and murdered two female passengers, triggering the Ministry of Land, Transport and Maritime Affairs and Seoul City to crack down on contract taxis to prevent possible crimes.
“As the court-interpreted contract taxi crackdown is against special laws for business, we cannot perform additional supervision on them,” a city official said. “The government should complement the legislation.”