Reasons for Proposal and Major Provisions

Advancements in IT have enabled the use of platform services that connect passenger transport service providers with consumers and accordingly, the passenger transport platform business system (platform transport business, platform transport franchise, platform transport brokerage business) was introduced (current Act amended on April 8, 2021) to combine taxis and platforms and provide people with a convenient taxi service.

With the growing market dominance of platform transport business entities, however, taxi drivers face unfair dispatching, excessive fees, and other monopolistic tyranny. Taxi passengers are also disadvantaged due to destination markers incentivizing drivers to cherry pick passengers, and the platform matching passengers with drivers who are a long distance away, but it is difficult to address these issues in an effective manner. 

Meanwhile, the Act prescribes fair allocation of passengers to transport franchisees and adjustment of charges and fares received by transport franchisees by stipulating the role of platform franchisors and through improvement orders for platform franchises to facilitate the smooth operation of platform franchises, ensure safe driving, maintain order in transportation, and promote passenger convenience. However, it does not prescribe such provisions in relation to platform brokerage businesses, making it necessary to modify the current statute.

Accordingly, the Amendment newly inserts improvement orders for platform brokerage businesses and obligations for platform brokers while also prescribing a fine of up to 10 million won for non-compliant platform brokers, thereby aiming to achieve fairness and orderliness in passenger transport and eliminate inconveniences to taxi passengers (Article 49-20, Article 49-21 and subparagraphs 17 and 18 of Article 92 newly inserted).