A 24-year-old office employee surnamed Park stands with his coworker on the sidewalk next to Tehaeranro in Gangnam-gu, Seoul, after leaving a company dinner at midnight on Tuesday. They both whip out their phones to order a cab on two of South Korea‘s most used taxi reservation apps, Kakao T and UT, but have little luck. A few taxis race past them, but are occupied or blinking with a green display that reads “reserved.”

“Using a taxi is almost the only way to get home past midnight. My company and social life are returning to normalcy after the pandemic, but the lack of available cabs isn’t helping,” he said.

Park is one of many people in Korea who are wondering what has happened to taxis that used to be so common before and even during the pandemic‘s peak.

With restrictions being lifted, the demand for cabs has been surging. Data shows that the root cause of the taxi chaos is the declining number of taxi drivers.

According to a report published earlier this month by South Korea’s Labor Ministry, the country had 5,700 fewer cab drivers applying for employment insurance in June compared to the same month last year. Another report by South Korea‘s Taxi Association showed that only 69,872 drivers remained in Seoul as of May, about 10,000 fewer than the 79,230 in Jan. 2020.

The decrease in drivers was caused by a mass exodus of younger cabbies, who went into the food delivery and logistics industries, according to industry insiders.

“Many cabs are being kept idle in parking lots because there are not enough drivers,” said a Seoul taxi driver.

“Many younger colleagues have moved to food delivery because more money could be made during COVID-19,” he said.

Cab drivers blame relatively low taxi fares in Korea, saying they could lose money due to rising gas prices. Seoul’s basic cab fare is 3,800 won ($2.90) and increases by increments of 100 won.

“With current fares, corporate taxis barely break even,” another driver said.

The average age of drivers has been rising, as younger people left in pursuit of better pay, while older drivers stay because the job has no age limit.

“The average age of drivers right now is in the late 60s. Older people who can‘t do anything else tend to stay, while younger people change jobs for better profit,” said an official at a local taxi operator. “There is no incentive for younger drivers to enter the industry.”

Aging drivers also say they often have health issues caused by working late.

“I can’t see well at night, so I leave work at around 6 p.m.,” a 75-year-old Seoul driver said, declining to give his name. “And that is perhaps why there aren’t enough taxis late at night because young drivers aren’t working in this industry.”

In order to combat the late-night taxi shortage, Seoul Mayor Oh Se-hoon decided in April to temporarily lift mandatory rest regulations for private taxi drivers, increase the supply of taxis working exclusively at night, and expand Seoul‘s late-night buses. However, industry insiders say authorities should look into the problem’s root cause and bring changes to the existing taxi industry to make it more profitable.

Kim Pil-soo, professor of automotive studies at Daelim University, said in a YouTube video uploaded in January that the “fundamental cause” of the taxi shortage is the country‘s lack of innovation in mobility.

Kim said “the government has some accountability for the taxi crisis,” citing South Korea’s decision to label Uber illegal in 2013 and to ban Korean mobility firm Tada in 2020. The ban left the industry reliant on traditional taxis, meaning that when licensed drivers left, there was no one to fill their place.

In response to such criticisms, South Korea’s Transport Minister Won Hee-ryong briefed President Yoon Suk-yeol on Monday concerning government measures to relieve the taxi shortage that included no concrete and immediate plans. Vowing deregulation for current taxi services, and expanding investments in future mobility, the minister said the government would allow taxi hailing platforms to flexibly increase fares when operating at night, and will review the implementation of new mobility services including car- and ride-sharing.

“Since (the shortage) is essentially a supply problem, we will activate market functions to induce an increase in supply,” the Transport Minister said.

By Lee Seung-ku (seungku99@heraldcorp.com)