Hong talks consensus in development of sharing economy

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Hong talks consensus in development of sharing economy

Finance Minister Hong Nam-ki said the government will work on developing a social consensus so Korea can lead in the sharing economy, so far held back by traditional businesses.

He added that technologies facing difficulties related to regulation need to be encouraged with the use of regulatory sandboxes.

“The sharing economy and remote medical diagnostic services are being developed in advanced economies, and there is no reason why Korea, which is a top-10 global economy, shouldn’t be,” Hong said at an SME CEO forum held at the Korea Federation of SMEs on Friday.

“I believe businesses related to shared economies and remote medical diagnoses should be vitalized,” Hong said. “The question is not one of technology but conflicts between interest groups.”

He said shared taxis are blocked by cab drivers, while shared lodging is opposed by the existing lodging industry. Remote treatment is being resisted by the medical community.

Hong said in reality it is hard to adopt these services without considering the interests of existing industries and said the government is working on encouraging compromise while creating an environment in which different interest groups, including existing industries, will be able to coexist.

“Shared taxis will only be adopted if support is offered and at the same time improvements are made to the existing system,” Hong said. “While the social consensus is taking some time, there’s a need to adjust interests and reach an agreement.”

Late last year, the issue of the shared economy resurfaced after taxi drivers strongly protested Kakao’s development of a carpool app service.

Kakao finally pulled the plug on the service. The government and the ruling party are trying to appease the taxi industry, proposing that passengers be allowed to share taxi rides, a practice banned since 1982.

Kakao is not the only company to have had trouble introducing a shared-driving service in Korea.

Uber, which first entered the Korean market in 2013, failed repeatedly in the country. Its only remaining service is UberBLACK, which has been operating since 2016.

The government has allowed for the remote monitoring of electrocardiogram data through a watch developed by a start-up. This is the first example of an ICT regulatory sandbox in the country, and the medical sector is up in arms.

The Finance Minister commented on the impact of fourth industrial revolution technology on the job market.

“At the Davos forum, there was speculation that jobs will be lost,” Hong said. “But several million jobs could be created centered on artificial intelligence.”

He said some predict that jobs where people work flexible hours, such as those in the delivery services or those paid per task completed, will become increasingly important.

“The government will have to prepare so that those job changes will be well absorbed.”

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