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The Lee administration must not stifle innovation before it starts

Published: 11 Jun. 2025, 00:02

Ahn Hai-ri

The author is an editorial writer at the JoongAng Ilbo.

The day after the presidential election on June 3, headlines were filled with profiles of President Lee Jae-myung, speculation about his inner circle and cabinet picks and analyses of voter behavior. Amid the political noise, one headline stood out: The price of private taxi licenses in Seoul had surpassed 100 million won ($73,000), a record high. While some attributed the rise to middle-aged workers turning to driving after losing jobs in a sluggish economy, this trend felt less like a symptom of recession and more like a warning sign of something deeper — the beginning of a decline in national competitiveness. It was more alarming than the 0.2 percent economic contraction in the first quarter or the Bank of Korea’s forecast of near-zero annual growth. It felt like a signal that the future was slipping away.

Taxis are parked at a street in downtown Seoul on Sept. 28. 2022. [YONHAP]

That concern is not an overreaction. Compare Korea to cities like San Francisco and Wuhan, where driverless taxis are no longer experimental. In San Francisco, Waymo launched fully driverless commercial service last year, now handling hundreds of thousands of rides weekly. In Wuhan, Baidu’s autonomous taxis — Apollo Go — already number in the hundreds. Meanwhile, Seoul has just three self-driving taxis operating on a trial basis in Gangnam at night, and even these require a human supervisor in the front seat. It’s a sobering contrast.

Korean companies once led the push into the future of mobility. Kakao Taxi began in 2015, and Tada, a ride-hailing platform, launched in 2018 with plans to revolutionize urban transport. But both the Moon Jae-in and Yoon Suk Yeol administrations viewed platform services with suspicion and prioritized protecting traditional taxi drivers. They imposed heavy-handed regulations that stifled innovation. Tada’s operations were shut down by legislation. Kakao Mobility, in order to stay afloat, ended up buying taxi companies. Instead of enabling the old and new industries to co-exist, policymakers forced next-generation mobility into outdated frameworks — and in doing so, buried Korea’s global competitiveness.

On February 24, 2022, the Fair Trade Commission announced that it would conclude its investigation into allegations that Kakao Mobility unfairly prioritized ride-hailing requests for affiliated taxis and begin disciplinary procedures as early as March. The photo shows Kakao taxis operating in central Seoul. [YONHAP]

Nothing illustrates this more clearly than the soaring value of taxi licenses. In markets where robotaxis are advancing, license values plummet. In Korea, the opposite happened. In the early 2010s, a Seoul taxi license cost about 60 million won. After the Moon administration passed the so-called “Tada ban law” and the Yoon government cracked down on Kakao Mobility, the price jumped beyond 100 million won. As Tada shuttered its basic services and most similar startups folded, only those who could purchase taxi licenses survived. The system locked innovation inside an old mold, driving license prices up and pushing progress backward.

Some may argue that protecting the livelihoods and property rights of taxi drivers is more important than the survival of a few tech firms. And indeed, transitional policies should cushion workers displaced by new industries. But this cannot be the whole story. Autonomous driving is not just a transport convenience — it integrates AI, software, semiconductors nand batteries. Falling behind in this space means losing ground in all those critical sectors. On June 5, Harvard Kennedy School’s Belfer Center released a ranking of emerging technologies. Korea’s AI competitiveness ranked ninth, scoring just 14.1 compared to the United States at 90.8 and China at 58. These global rankings reflect, in part, policy choices that failed to prioritize the future.

That is why the Lee administration must take a different approach. President Lee has pledged to center science and technology policy around AI, including the possible appointment of a deputy prime minister for science and a 100 trillion won investment initiative. These are welcome signals — but only if the administration avoids repeating the mistakes of its predecessors.

A render of Hyundai's Ioniq 5 EV SUV equipped with Waymo's self-driving system [HYUNDAI MOTOR]

There is cause for concern. In his first Cabinet meeting, President Lee reportedly called for increased staffing at the Fair Trade Commission to monitor platform companies. That move risks reinforcing the same regulatory mindset that stifled innovation during the previous two administrations.

If Korea is to regain its edge, the government must resist the urge to look backward. The Lee administration has just begun. Rather than cornering platform businesses once again, it should focus on building the industries of the future — and fast.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.