Monday, February 18, 2019

taxi-fare hike

Taxi fares have just jumped a nut-kicking 27% in Seoul—from a base fare of W3000 to a new base of W3800. Taxi drivers' meters haven't yet been reprogrammed, so when you take a taxi right now, you're confronted with a laminated, foldable chart that shows the rate increase. There's a copy of the chart in back for the passengers, and a copy in front for the driver to consult as well. For people paying via T-Money or credit card, what happens is that the driver consults the fare chart to see how much to add to the fare on the meter. His card reader has an "add fare" feature, and he adds the appropriate amount to your fare. With the new fare now punched in, you—the passenger—use your T-Money or credit card the way you normally do.

The fare hike comes at a bad time, from the passenger's point of view: only recently, there were all the rumblings about bringing a new Kakao ride-share app into the marketplace as a cheaper and possibly friendlier alternative to regular taxis. Cabbies went ballistic because they're not keen on competition, so the ride-share app was abandoned, just like Uber before it. Now, with the hike in taxi fare, people will be even less motivated to take cabs.

Something's got to give, though. The average age of a Seoul cabbie is a bit over 60; these drivers are a dying breed, which is obvious from their high average age. They're not being replaced by younger drivers, which means that the taxi service as a whole is going to die out unless something takes its place. In a market environment, I trust that nature abhors a vacuum, and services like Uber and the Kakao ride-share app might simply be waiting in the wings, looking for the best time to strike. All those old cabbies aren't dead yet, though, so it'll be a while before we truly start to see viable alternatives to taxis. Who knows? By that point, driverless cars might be a thing.

NB: I've asked one or two cabbies whether they're going to have their meters adjusted so that we don't have to keep manually consulting these charts. They've said yes.


Charles said...

I'm not sure if the average age of taxi drivers means that the service as a whole is going to die out. It's more likely, I think (at least judging by the few conversations I've had with taxi drivers), that getting a taxi is seen as a post-retirement option for those who still need to work. So as the older drivers move on (in whatever fashion), there will be younger old drivers to take their place.

Which is not to say that the taxi service as a whole isn't in trouble. It does seem to be sliding toward a precipice, and one wonders how long the taxi lobby will be able to hold off the Kakao hordes (if I may be allowed to mix metaphors here).

Kevin Kim said...

I can't really reply to this without doing some actual demographic research. Your assumption seems to be that taxi drivers are generally a self-selecting population (undeniably true), with (most?) drivers entering the force at retirement age. That may be the case. My assumption is that the reason newspapers have harped on the drivers' average age, over the last few years, is that the average age has been rising, which implies a steadily aging workforce where the aging isn't being counteracted by the appearance of younger cabbies.

So there are some questions to answer before we go further:

1. Do most cabbies begin their tenure as cabbies at retirement age? If so, then the average age of a cabbie ought not to change very much over time.

2. Has the average age of Seoul cabbies been rising over the past decade or two? If yes, then we are, in fact, dealing with an aging workforce that has a chance of eventually dying out if younger cabbies don't arrive to replace the old guys.

3. How many Seoul cabbies are there, and how do their ages plot out on a curve?

If Korea has a bureau of statistics with an online presence, I might be able to find some numbers.