Four major Korean taxi associations have strongly urged the government to roll back Uber Taxi's plan to impose distance-based tiered commissions. Attention is turning to whether regulators will intervene as the conflict between Uber Taxi and the taxi industry over the new fee structure intensifies.
According to Seoul Economic Daily's reporting on Tuesday, the four groups — the National Private Taxi Transport Business Cooperative Federation, the National Taxi Transport Business Cooperative Federation, the National Taxi Labor Union Federation, and the National Democratic Taxi Labor Union — sent protest letters to the Ministry of Land, Infrastructure and Transport (MOLIT) and the Fair Trade Commission (FTC) demanding that Uber Taxi withdraw its fee restructuring.
The day before, Uber notified taxi drivers using its app of a new fee structure taking effect on June 5. The core of the overhaul is the introduction of distance-based tiered commissions. Specifically, rides under 10 kilometers will carry a 0% fee, rides of 10 km or more but under 20 km will carry a 4% fee, and rides of 20 km or more will carry an 8% fee.
The new structure applies to all taxi drivers using the Uber app regardless of franchise affiliation. Drivers who do not agree will be restricted from using the app. The plan has drawn particular controversy because it also imposes the same fees on non-affiliated taxi drivers who previously paid no commission at all.
In response, the four groups said, "Uber claims this fee overhaul went through prior procedures with the taxi industry, but in reality it was a unilateral notification without any consultation or gathering of opinions." They called it "a measure that unfairly shifts the burden onto the taxi industry for the company's own profit without any reasonable basis."
They added, "With business conditions already deteriorating due to prolonged high oil prices driven by Middle East instability, the introduction of new fees will compound the industry's pain." They warned, "If this fee policy spreads to other platforms, it could cause serious damage across the entire taxi industry."
An Uber official countered that the decision was not unilateral. "We met with all four taxi groups in advance to provide information about the new fee structure and sought their advice and consent," the official said.
The taxi industry is hoping that MOLIT and the FTC, as the competent authorities, will put the brakes on Uber Taxi's move. Under current regulations, a taxi platform intermediary must file a report with the MOLIT minister and the FTC chairperson before connecting users with drivers and collecting commissions.
A MOLIT official said, "When Uber files a report on the new fee structure, we will examine the details closely and assess its appropriateness."