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The Peninsula

The Sharing Economy and Korea’s Fragile Social Safety Net

Published January 29, 2019

By Yea Ji Nam

In December 2018, close to a hundred thousand taxi drivers took to the streets around the National Assembly to protest against the launch of a mobile ride-sharing service from Kakao Mobility. Amid these rolling protests, two elderly taxi drivers set themselves on fire to bring attention to the challenges facing Korea’s taxi drivers.

While some might be tempted to castigate the taxi drivers as Luddites, bitter protests against the introduction of Kakao’s carpooling service reflect their persistently precarious livelihood and weaknesses in Korea’s welfare system.

When Kakao Mobility announced the launch of carpooling service on October 16, 2018, the company used language that focused on respecting taxi drivers. The company’s statement clarified that Kakao did not intend to undermine the local taxi industry and reiterated their commitment to operating only during specified commuting hours. The company also highlighted the broader social benefits of the service, promising to relieve rush hour traffic snarls.

Despite these seemingly reasonable concessions, taxi drivers opposed the launch of the carpooling service. One immediate issue was the disagreement around the meaning of commuting hours. Kakao did not specify what it meant by “commuting hours,” leaving open the potential for the ride-sharing app to operate at all times.

More fundamentally, the taxi drivers were expressing their frustration at the insecurity facing older workers in the service industry and the perceived indifference of the government to their anxieties. In addition to their low income, 54% of taxi drivers in Korea are over 60 and would face immense difficulties finding new employment. With both the welfare system and the country’s industrial policies threatening their ability to live with dignity, taxi drivers turned their anger on not only Kakao but also the Moon’s administration.

As a result of a strong backlash, Kakao Mobility backed off a little and temporarily postponed the official launch of its carpooling service. However, the Moon’s administration did not take a clear position on the taxi union’s demands for improved protection and a more robust social safety net.

To resolve this dispute, several cases from other countries can serve as a benchmark for establishing a better welfare policy for the elderly.

First, Korean taxi drivers are mad at working long hours for low pay. In the Netherlands, however, drivers earn more than the country’s average salary and they are highly respected. Social awareness of drivers in the Netherlands impacts both their income and society’s approach to issues affecting this workforce, including aging.

Second, 54 percent of Korean taxi drivers are over the age of 60 and face challenges finding a new job. Norway is a country with one of the largest elderly communities in the world (by share of the total population). The government proactively provides job opportunities to workers over the age of 65 and provides generous welfare to the elderly.

These are some policies that the Moon’s administration could consider to address the underlying anxieties of taxi drivers and soften the pushback against innovative companies like Kakao. Perhaps more importantly, the government should do more to demonstrate their concern for taxi workers – and let them know that they have not been forgotten.

Yea Ji Nam is currently an Intern at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from the Republic of Korea’s photostream on flickr Creative Commons.

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