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Government finally intercedes in escalating mobility wars

June 15,2019
The government has finally taken steps to resolve the conflict between taxi companies and mobility start-ups, though they are just baby steps at this point.

The Ministry of Land, Infrastructure and Transport said Friday that it had met with several transportation start-ups. They are all members of the Korea Startup Forum, a lobby group.

Companies attending the discussion included VCNC, which operates the Tada ride-sharing service, Poolus, a carpool service platform, and KST Mobility, which operates the Macaron taxi reservation service.

The ministry discussions focused mainly on ways to realize terms agreed on by the mobility tech companies, the taxi industry and the government on March 7.

They talked about creating a new market for transportation platform companies and a framework for the coexistence of the tech companies and legacy taxi services.

The Friday’s meeting is the first action taken by the government since the government, Kakao Mobility and the taxi industry were able to reach the agreement in March, led by a task force created by the Democratic Party.

At the time, the three parties agreed that Kakao Mobility will be allowed to operate at limited times while the government will come up with measures to implement a monthly salary system for taxi drivers.

The peace didn’t last long.

The new agreement needed legislative reforms, of which there have been none, while taxi companies, whose labor costs are expected to rise due to the monthly salary system, have strongly protested.

Taxi drivers have shifted their anger from Kakao Mobility, which has been put on indefinite hold, to the Tada ride-sharing service. Tada has been able to operate by taking advantages of loopholes in the law.

An unexpected and very public dispute between Financial Services Commission (FSC) Chairman Choi Jong-ku and Lee Jae-woong, CEO of Socar, only exacerbated the situation.

Socar is the parent company of Tada.

Tensions escalated when FSC Chairman Choi Jong-ku called Lee rude and selfish, adding that he needs to show more respect to the taxi drivers only trying to keep their jobs.

This led to series of tit-for-tat attacks.

The Transportation Ministry remained on the sidelines throughout these exchanges, prompting both the taxi industry and the start-ups to demand the government take more aggressive action in resolving the conflict.

The Korea Startup Forum last month released a statement saying that as much as the existing taxi industry is facing difficulties, mobility start-ups are growing increasingly concerned about the future.

The lobby group said if the taxi industry continues to stop discussions over mobility innovation by distorting the truth and pushing for violent political acts, both the taxi industry and mobility start-ups will perish.

The Korea Startup Forum reiterated that platform services do not threaten the livelihoods of taxi drivers.

“As an agreement was made between platform companies and the taxi industry to improve transportation, the agreement that was made should be acted upon,” said Jeong Kyung-hoon, head of the ministry’s transportation and logistics office.

“The government will strengthen communication with the industry to achieve the coexistence of the taxi industry and the sharing economy, and resolve conflict.”

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]


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