Seoul sets financial support, settlement guidelines for village buses
Two-day training for operators set for Sept. 16-17
The Seoul Metropolitan Government has drawn up new financial support and settlement guidelines for village buses and will begin implementing them.
As of Tuesday, the city plans to distribute the "Seoul Village Bus Financial Support and Settlement Guidelines" to village bus operators and hold a two-day training session on Sept. 16 and 17. The new guidelines specify which expenses village bus subsidies may and may not cover, and what documents operators must submit to the city when spending subsidies on key items such as labor costs.
The city provides financial support to money-losing village bus operators to offset losses caused by the integrated transfer discount system. According to the city, Seoul has 140 village bus companies operating 252 routes, with about 1,630 buses in service and roughly 3,000 drivers. Seoul provided a total of 41.2 billion won ($30.7 million) in support last year, with as many as 115 village bus companies receiving financial support in a given month. The Seoul Village Bus Transport Business Association said transfer-related losses average around 100 billion won a year. It argued that the city should fully cover the losses incurred under its transfer system. When a passenger pays the 1,200 won village bus fare and then transfers to a city bus or subway, the village bus loses about 600 won on average. The association has demanded that the city cover this amount in full.
The city, for its part, has raised concerns about the quality of village bus service. A fact-finding survey the city conducted from June to July last year covered subsidized village bus operators. Although routes were authorized to run buses at intervals of seven to 12 minutes, compliance stood at just 42 percent. Some operators applied for subsidies even for vehicles parked at garages and not in service. Others ran subsidy funds through the same account as regular revenue instead of keeping a separate account, or failed to list labor costs as a separate line item.
The city and the association have been negotiating how to calculate "transport cost," the baseline used to set subsidy levels, and during last year's negotiations the association even raised the possibility of withdrawing from the transfer discount system.
The two sides ultimately agreed to increase total bus operations this year by 5 percent over 2025. They also agreed to raise the deficit subsidy — tying it to the increase in operations — from 41.2 billion won last year to about 50 billion won this year. As of the end of July, cumulative operations this year reached 5,314,139 trips, up about 5.25 percent from 5,053,551 trips over the same period last year. Financial support through July also rose about 9.09 percent, to 28.8 billion won from 26.4 billion won a year earlier.
The newly drafted settlement guidelines are also part of that agreement. "The guidelines will improve transparency in how subsidies are used," a Seoul city official said. "They also bring together relevant provisions from laws such as the Passenger Transport Service Act and the National Finance Act, so we expect them to make things easier for small-scale bus operators as well."
Meanwhile, the village bus industry held a vehicle protest on Wednesday, demanding a fare increase. The Seoul Village Bus Transport Business Association says the industry has reached its limit due to a prolonged fare freeze, rising transport costs and accumulated transfer losses. It argues that fares need to rise starting next year.
The association formally proposed a fare increase to the city on Aug. 19, calling for a hike from the current 1,200 won. Seoul's village bus fare rose from 500 won in 2004 to 600 won in 2007, 750 won in 2012 and 900 won in 2015. It then remained frozen for eight years before rising to 1,200 won in 2023. The association argues that Seoul's fare is among the lowest in the country compared with Gyeonggi Province (1,650 won), Busan (1,480 won) and Daejeon (1,350 won).
Alongside this, transfer passengers account for about 60 percent of village bus riders — more than those who ride without transferring. But under the integrated transfer fare-sharing structure, transfer fares make up only about 41.9 percent of village buses' total revenue, according to the association. It said that under the current fare of 1,200 won, only about 600 won is allocated to village buses, meaning operators lose money the more transfer passengers they carry. The association plans to stage a protest surrounding Seoul City Hall for about an hour starting at 10 a.m., from Wednesday through Friday.
cook@heraldcorp.com
