“I'm envious that Korea can adjust fares in real-time with app meters. In Japan, we still have to take apart the machines to change fares.”
On the 18th of last month at a taxi company's garage in Seoul. A delegation from Japan's X-Taxi, which examined the operational status of corporate taxis in Korea, expressed astonishment. While listening to explanations from officials at the Seoul Corporate Taxi Transportation Business Association, they continuously took notes. Although Japan is known as a 'taxi advanced country,' they realized on-site that they are actually lagging behind Korea in both technology and systems regarding the digital transformation of the taxi industry.
X-Taxi was established in 2020, after a sharp decline in transportation demand due to COVID-19, by over 100 corporate taxi companies nationwide in Japan. This visit to Korea was undertaken as the Japanese government is seriously considering the introduction of app meters, aiming to benchmark successful cases in Korea.
The app meter is a device that automatically calculates fares by collecting real-time data on the vehicle's location, distance, and speed, based on GPS. In 2021, Korea allowed the introduction of smart app meters through a government-led regulatory sandbox, which is now spreading nationwide, starting from Seoul.
With app meters, fare changes can be made immediately through software updates, unlike the previous method where the meter had to be taken apart. Additionally, operating data is collected in real-time, which can be utilized for analyzing regional operating patterns or managing passenger caps. The Seoul Corporate Taxi Association explained to the delegation that “app meters contribute significantly not only to fare management but also to operational efficiency,” adding that “policy research utilizing demand data is also underway.”
Japan still primarily uses mechanical meters. App meter pilot projects are only being conducted in a few large cities like Tokyo, and the taxi calling methods are traditional. In Osaka, the usage rate of taxi calling apps is only 30-40%, and it's around 55% in Tokyo. There are significant concerns about privacy protection, which slow the spread of app-based calling or payment systems. The Japanese delegation assessed that “Korea is far ahead in both the proliferation of calling apps and digitization.”
The X-Taxi delegation visited Kakao's headquarters in Pangyo to observe a demonstration of autonomous vehicles and signed a memorandum of understanding (MOU) for the digital innovation needed to establish smart taxi infrastructure. Kakao introduced its unmanned dispatch kiosks, app meter systems, and case studies of autonomous driving while presenting a platform-based management innovation model. Kiyokawa Susumu, the representative of X-Taxi, said, “It was impressive to see the preparations for an autonomous driving ecosystem in collaboration with the existing taxi industry.”
The two countries also discussed the chronic issues of aging in the taxi industry and strategies for responding to autonomous driving in depth. Japan has a corporate taxi ratio of 90%, with an average of 2.5 drivers needed per vehicle based on Tokyo standards. However, the challenges of aging and labor shortages are intensifying. Korea faces similar issues. An official from the Seoul Corporate Taxi Association noted, “It is difficult to secure new personnel due to the obligation of hiring full-time employees and low revenue,” adding that “there is a need for diversification of work formats and improvements in the hiring system for foreign drivers.”
Additionally, discussions were held regarding the sense of crisis surrounding autonomous driving technology and regulations on ride-sharing. Kim Dong-young, a senior researcher at the Korea Development Institute (KDI), advised that “innovation should be approached from the perspective of market expansion,” stating that the market-driven growth of the industry should be promoted through the design of ride-sharing and autonomous taxi systems utilizing taxi licenses.
The Seoul Corporate Taxi Association plans to visit Japan in the second half of the year to introduce the Seoul-style smart taxi model and examples of digital transformation. An official from the association remarked, “Although we thought Japan was ahead, we confirmed that Korea is leading in both technology and systems,” and stated, “The taxi industry now needs a time for coexistence and strategic response rather than competition.”