Uber Taxi, the ride-hailing platform, is introducing a new fee structure that charges drivers tiered commissions based on trip distance. The taxi industry is pushing back sharply, calling the move a "unilateral notice" made without prior agreement.
According to industry sources on Monday, Uber Taxi notified all affiliated and non-affiliated taxi drivers of the new commission structure, set to take effect on June 5. The revised terms apply equally to every taxi driver using the Uber application regardless of affiliation status. Drivers who do not agree to the terms will be restricted from using the app.
The centerpiece of the overhaul is a distance-based tiered commission. Specifically, trips under 10 km carry a zero percent commission, trips of 10 km or more but under 20 km carry 4 percent, and trips of 20 km or more carry 8 percent.
For example, on a trip between 10 km and 20 km, if the metered fare comes to 10,000 won and the passenger surcharge is 2,000 won, the commission would be 400 won and 80 won respectively — 4 percent of each amount.
Uber said the changes could have a positive effect on driver earnings. "There is absolutely no commission burden on short-distance calls under 10 km," the company said. "Even for long-distance calls where a commission applies, the base fare itself is large enough that earnings per hour can actually be higher."
The taxi industry's response, however, has been cold. Uber Taxi Korea CEO Song Jin-woo reportedly met with taxi associations in mid-May to gather opinions in advance, but the industry regards the move as a unilateral announcement made without agreement and has expressed dismay. Resistance is expected to be particularly fierce because the commission applies not only to affiliated taxi drivers but also to non-affiliated drivers who previously paid no fees at all.
An official at one taxi association said, "We clearly expressed our opposition when CEO Song explained the overhaul two weeks ago, and we are taken aback that it was suddenly announced." Another association official countered, "At that meeting there was only talk of strengthening services targeting foreign tourists — there was no mention of a commission overhaul."
Frustration is also mounting among rank-and-file taxi drivers, who are calling it a "sneaky commission." One driver pushed back strongly, saying, "If they raise commissions by ambush like this, who would use Uber?"