Seoul, South Korea – The South Korean government is set to introduce a new law granting it the authority to issue improvement orders regarding taxi dispatch and fare calculations, in a bid to curb unfair practices within the taxi-hailing platform industry. This move aligns with the government's "Three Innovation+ Strategies for the Transportation Sector," announced earlier this year by President Yoon Suk-yeol.
While the government expects these new regulations to foster a more competitive environment in the taxi platform market, currently dominated by Kakao Mobility, industry players have expressed concerns about increased government intervention and additional regulations.
A Ministry of Land, Infrastructure, and Transport official revealed that the government is preparing to introduce a bill by the end of the year. "The authority to issue improvement orders regarding taxi dispatch and fare calculations requires a legislative amendment," the official said, adding that both government-proposed and lawmaker-proposed bills are being considered.
The proposed legislation is expected to be based on a previous bill introduced by Rep. Jin Sung-jun in 2022, which aimed to regulate platform-based transportation services. The bill proposed imposing fines on platform operators that violated regulations and establishing guidelines for fair passenger allocation and fare adjustments for affiliated drivers.
Industry experts have raised concerns about the potential negative impact of government intervention on the flexibility of the taxi market. They argue that taxi dispatch systems are highly technical and involve sensitive business information, and that government intervention could stifle innovation and hinder the ability of companies to operate efficiently.
Moreover, the government's involvement in fare setting is seen as unnecessary given that local governments already have the authority to set base fares, distance-based fares, and surcharges. Some experts argue that government intervention could limit the flexibility of fare adjustments, which can be crucial during periods of high demand, such as late at night.
Meanwhile, the government's plans to introduce a "service evaluation system" and a "superior platform certification system" for platform taxis, as outlined in the "Three Innovation+ Strategies," are expected to be implemented on a pilot basis starting next year. While the specific criteria and evaluation methods for these systems have not yet been finalized, industry players are closely watching their development.
A Ministry official stated, "We are still reviewing the evaluation criteria and the distribution of points for each item. We plan to seek input from industry stakeholders by the end of the year and conduct the first pilot evaluation next year."
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