Ride-hailing and other app-based mobility services will finally become legitimate in Korea after years of delays and overturns due to strong opposition from the taxi industry.

The Ministry of Land, Infrastructure and Transport said Wednesday it was proposing changes in the related laws to enable licenses to ride-hailing operators including Tada, a van-rental service. It plans to take administrative procedures by the year-end.

Under the proposal, the number of ride-hailing services would be capped within the boundary of total taxi driver licenses. The government said it plans to repurchase more than 1,000 taxi licenses a year to keep the quota on the roads under control.

Car-hailing services must shell out a portion of their earnings to a state-managed fund that would be used to assist the taxi industry, such as buying taxi driver licenses and improving drivers’ welfare, in return for legitimate permit for their business.

Rental cars also can expand business to ride-hailing and carpool. But to ensure passenger safety, their drivers would need to be certified taxi drivers.

Taxi-hailing services like Waygo Blue and Macaron Taxi would be able to operate as franchise models by partnering with mobility platforms and traditional operators.

Platform operators like Kakao T, which connects passengers and taxis via a mobile app, can continue with their business on simple registration, rather than having to seek separate permission. Their service could be broadened to arrange customized carpool rides for kids, females, seniors and tourists. They would be invited to experiment with new technologies such as GPS-based taximeter to innovate ride services.

Common ride-hailing services like Uber have not been able to pick up in Korea because of diehard resistance from taxi drivers who see the rivalry as a threat to their livelihood. They have staged mass demonstrations, with three drivers taking their own lives in protest. The extreme actions forced Kakao Mobility to temporarily halt the test service of its new carpool app earlier this year.

Other startups have tried to introduce similar carpool or ride-sharing services in compliance with the Korean transportation law, which recently has been slightly eased to permit such services only during busy commuting hours. But they either had to pull out completely due to strong backlash from the taxi industry or significantly curtail their services to avoid regulation hurdles.

By Choi Hee-seok and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]