The conflict between Uber Taxi and taxi industry groups over a new fee policy has entered a lull following mediation by the Ministry of Land, Infrastructure and Transport (MOLIT). Attention is now focused on whether the two sides can narrow their differences, as Uber has agreed to arrange direct talks with the taxi industry soon.
Song Jin-woo, General Manager of Uber Taxi Korea, plans to hold a briefing on the revised fee structure for four domestic taxi associations this month, according to industry sources on Wednesday. The move follows MOLIT's request a day earlier that Uber strengthen communication with the taxi industry. "We are currently coordinating meeting schedules with taxi associations," an Uber Taxi official said. "We plan to discuss various issues raised since the fee announcement."
The dispute was triggered by Uber's announcement on June 2 of a distance-based tiered fee system. Starting June 5, the company will abolish its existing 2.5 percent franchise fee and instead charge all drivers — regardless of franchise affiliation — a fee proportional to trip distance.
The move is widely seen as Uber's strategic gambit to compete against market leader Kakao Mobility. Since entering Korea in 2013, Uber has experienced setbacks including a business withdrawal and a split with its partner T Map Mobility, leaving it with a market share of around 5 percent. The new revenue model is designed to shake up the market. Uber believes the restructuring will be a "win-win" for both the company and drivers, given the Korean market's heavy concentration of short-distance rides in urban areas.
However, this blueprint met fierce resistance before even taking effect. Uber claims it obtained prior consent, but the taxi industry maintains the change was a "unilateral notification." Non-franchise drivers who previously paid no fees are particularly discontented. Moreover, given that Uber's primary customer base consists of foreign tourists, critics argue that taxis primarily serving mid- to long-distance routes such as airport transfers will inevitably see their earnings decline. The four taxi associations sent protest letters to MOLIT and the Fair Trade Commission (FTC) demanding the reversal of the restructuring.
MOLIT plans to observe the negotiation process between the two sides before deciding on further measures. Depending on the outcome of discussions, partial modifications to the fee structure remain possible. "We will make every effort to reach an amicable agreement with the taxi industry, which is an important partner," an Uber Taxi official said. "We will also maintain close communication with MOLIT."