With the legal enforcement deadline in Aug. next year approaching, the Ministry of Land, Infrastructure and Transport is preparing an improvement plan for the taxi monthly salary system and is reviewing a plan to apply the "40-hour workweek" rule differently by region and by income. With the taxi industry and unions strongly opposing the uniform application of the current system, attention is on whether the government will consult with the National Assembly to present a revised plan that reflects reality.
According to the ministry on the 25th, the government reported an improvement plan for the taxi monthly salary system to the National Assembly in Aug., and specific discussions on the revision are now continuing, centered on the Land Infrastructure and Transport Committee.
The current Act on the Development of the Taxi Transport Business (Taxi Business Act) has set Aug. 20 next year as the nationwide enforcement date, so an alternative must be finalized before then. Last year, the National Assembly postponed enforcement for two years by agreement between the ruling and opposition parties with the condition of a "government improvement plan report within one year," and the current discussion is a follow-up procedure.
The taxi monthly salary system was introduced in 2019. It mandates corporate taxi drivers to work at least 40 hours per week and guarantees a certain level of monthly pay. Seoul implemented it first in 2021, but side effects grew due to a sharp drop in operating rates and the bankruptcy of corporate taxi companies.
In the provinces, passenger demand is low, making it difficult to secure drivers, and there is strong backlash because older drivers find it hard to endure long working hours. The industry points out that "the system does not reflect reality," while unions say that "excessive work coercion drives people away." Against this backdrop, the government and the National Assembly have moved to prepare alternatives.
There are two main alternatives under discussion. First, differential application by region. In large cities such as Seoul and the greater metropolitan area, drivers would be required to work at least 40 hours per week, while in provinces with low passenger demand, only a certain share of all drivers would be required to meet the 40-hour threshold. However, the exact percentage to be applied in the provinces has not been finalized, and the ministry is consulting with labor and management.
Second, an income-based banding system. The monthly salary system would apply only in regions where transportation income per driver is at least 4 million to 5 million won per month, while regions below that level would maintain the existing method or run a different wage system in parallel.
The industry believes that to pay a fixed monthly salary of 2.04 million won, transportation income per driver must be at least 4 million to 5 million won. A taxi industry official said, "Even if it is possible in Seoul and the greater metropolitan area, income is far too low in the provinces," adding, "Without income-based differentiation, the burden on business owners will grow and the system itself will collapse."
In fact, the ministry also acknowledges that income disparities by region are large and is continuing discussions with labor and management on differential application.
Labor is also putting up strong resistance. The National Taxi Labor Union Federation worries that older drivers will find it difficult to endure long hours and may leave the industry in large numbers. According to the Korea National Joint Conference of Taxi Association, as of Jul. this year there were 72,555 corporate taxi drivers, a sharp decline from levels above 100,000 in 2019.
Political views also differ markedly. Lawmakers from the greater metropolitan area say the monthly salary system is needed to ensure job stability, while lawmakers from Yeongnam and Honam emphasize practical limits. A ministry official said, "Both the ruling and opposition parties have diverse views, so coordination is needed," adding, "We plan to compile reasonable opinions from labor, management and the political sphere and report a revision bill to the National Assembly."
The labor policy stance of the Lee Jae-myung administration is also a variable. This administration has presented the guarantee of workers' rights and respect for labor as core tasks. Activating supra-enterprise bargaining, supporting a 4.5-day workweek, extending the retirement age, and legislating equal pay for equal work are among the key pledges. If the government is to adjust the mandatory 40-hour rule in the taxi monthly salary system, it will likely need to find a balance between this rights-guaranteeing stance and the industry's realities.
Experts note that the key is to devise a flexible pay system while preserving the original purpose of ensuring job stability and improving drivers' treatment. Kim Dong-young, a researcher at the Korea Development Institute (KDI), said, "A wage system must be established that both business owners and drivers can accept," adding, "Only when the wage system becomes realistic can it be regarded as an investment rather than an expense, and within the scope of guaranteeing the minimum wage, a flexible monthly salary design that reflects the characteristics of regions and industries is needed."