Gov’t wants to make car rentals easier than before

People who want to drive themselves around Korea will find it easier after the Ministry of Land, Transport, and Maritime Affairs announces a plan to boost the rent-a-car business.

This is needed, with summer vacation coming around and many people expecting to use car rentals, the ministry said Thursday.

The ministry said it will first introduce a system to make it easier for people to rent cars for one-way trips by recommending alliances of small car rental companies.

The one-way drop-off service is currently restricted to major rental companies like KT Kumho Rent-a-car and AJ Rent-a-car, because they have branches in many regions. Smaller companies couldn’t offer it because it was too expensive to get the rentals back to home base.

According to the ministry’s report, if a customer rents a midsized car like Hyundai Motor’s Avante in Seoul and decides to drop it off in Busan, the southern port city that is 453 kilometers (281 miles) from the nation’s capital, the average charge by small companies is about 180,000 won ($156).

Under the new system bringing smaller rental companies together, the price should drop.

Since the rental car business was first introduced in Korea in 1969, rental companies have grown steadily.

There are now about 800 companies with more than 280,000 vehicles; and with low barriers to enter the business, small local companies were founded throughout the country, according to the ministry.

The ministry said it wants to connect and link up those small companies and enhance rental services. The government expects that a network system will help small companies improve their businesses.

However, the Korea Rent-A-Car Association was in doubt; getting a license for operating one-way, drop-off services is too strict.

In order get a license, the company should have at least one branch in each of 17 cities or provinces, and they should have an average of 30,000 vehicles registered.

“I think only major corporations can meet that requirement,” said an official from the Korea Rent-A-Car Association. “In fact, according to our research, there’s not much of a demand for one-way, drop-off service, so we don’t know if this will actually work.”

Meanwhile, the ministry will also allow rental companies to offer drivers for regular customers. Previously, only foreigners, physically disabled persons and people who are over the age of 65 could ask for a driver for their rentals.

The service allows customers without driver’s licenses to rent cars.

By Joo Kyung-don [kjoo@joongang.co.kr]