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68 percent of intercity bus routes from Incheon could close this month

Aug 11,2018
Two-thirds of intercity bus routes between Incheon and Seoul may stop operations as early as this month.

On Thursday, six intercity bus companies submitted a joint notice informing the Incheon Metropolitan City government that they plan to stop operating 19 bus routes and 259 buses from Aug. 21 due to financial difficulties, said the Incheon government on Thursday.

Most of the routes that will cease operations go from Incheon to popular destinations in Seoul, including Sinchon in western Seoul, Seoul Station in central Seoul and Gangnam in southern Seoul.

If the closures go through, 19 out of 28 - or 67.8 percent - of Incheon-based intercity bus routes will disappear. The M-Bus, an intercity express bus system managed by the Ministry of Land, Infrastructure and Transport, will remain in operation.

Currently, 11 bus companies, including M-Bus, operate 344 intercity buses based in Incheon, the majority of which go to Seoul. The city government estimates that 36,000 Incheon residents take intercity buses every day to get to and from work in Seoul.

Financial difficulty is what’s driving these bus companies to shut down routes.

“Due to the minimum wage rise and the recent rule on guaranteeing break times for bus drivers, our companies are facing increasing deficits,” read the companies’ notice to the government.

“Many drivers are also leaving to take jobs at buses operating under a semi-public system where they receive higher pay, making it difficult for us to run normal services.”

An intercity bus based in Incheon currently costs around 569,480 won ($504.23) per day to operate, but only makes 536,130 won in daily revenue on average.

The 16.4-percent minimum wage rise from 6,470 won to 7,530 won hiked up annual labor costs from 12 billion won to 14 billion won for these six intercity bus companies this year.

From this February, a new law also began requiring all bus companies to guarantee drivers 15 minutes in break time for every two hours of work, forcing them to hire more drivers to offer the same number of service hours as before.

The Incheon city government’s adoption of a semi-public bus system for its intra-city buses in 2009 was critical in hurting the competitiveness of private intercity bus companies. Under the semi-public system, buses are managed jointly by private companies and municipal governments, with the total deficit being covered by the city’s budget.

Bus drivers working under the semi-public bus system are paid up to 600,000 or 700,000 won more in monthly income.

“There are fewer passengers in general now that other transport options like the Suin and Incheon 2 subway lines are available,” said Shin Dong-wan, chief executive of one of the intercity bus companies that intend to close some of its routes. “Intercity buses need highly qualified drivers due to the long bus routes, but the high labor costs make it nearly impossible for us to provide the same services as before.”

Incheon residents are also worried about the prospect of having these bus routes cut.

“While it takes me an hour [by bus] to get to Gangnam and Sinchon from home, taking the subway would take me two hours,” said a 38-year-old living in Songdo, Incheon. “Without the buses, people who don’t have cars like me will have difficulty going to work and meeting friends in Seoul.”

From Tuesday, drivers and employees of intercity bus companies began holding rallies in front of the main gate of the Incheon city government building, demanding financial support and the intercity buses’ incorporation into a semi-public system as well.

“We didn’t receive any response from the Incheon government on our notice of shutting down bus routes,” said an employee from one of the intercity bus companies on Friday.

So far, the Incheon city government is showing no signs that it will - or has the means to - take the intercity buses under the umbrella of the semi-public bus system.

The local government expects that it will invest 105 billion won this year in subsidizing intra-city buses that are already part of the semi-public bus system.

Though Incheon is considering subsidizing intercity buses with 2.3 billion won to cover higher labor costs, it is unclear whether that sum can fit into its budget or offer anything more than a temporary solution.

“As much as the minimum wage hike is a national policy, we are reviewing the possibility of asking the central government to subsidize the extra labor costs,” said a spokesman from Incheon city government. “We are looking into various ways to respond to the [companies’] demands.”


BY CHOI MO-RAN [kim.eunjin1@joongang.co.kr]


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