The bad news is that Seoul City Community Bus Company has asked the municipal government to expand its financial support and announced that it will withdraw from the public transportation exchange system.
This morning, the Seoul City Community Bus Transport Alliance held a press conference in the Seoul Yunnanpur District Union Conference Room, announcing that it has sent a letter to the city of Seoul requesting the cancellation of the 2004 Public Transport Swap Integration Agreement and announcing that it will withdraw from the swap system from January 1 next year.
The alliance argues that since the implementation of the public transport switching system in July 2004, the community bus enterprises have suffered losses.The alliance Chairman Kim Jong-il said: “Before the switching system was implemented, even without financial support we could operate properly, but the cumulative amount of switching losses over the past 20 years has reached 1 trillion yuan, it is difficult to continue operating, withdrawal is an inevitable option.”
At present, when passengers change from community buses to city buses or subways, the actual settlement amounts obtained by community bus companies are 667 won (city buses) and 676 won (subways) respectively. This is 524 won and 533 won less than the base fare (1200 won). The alliance criticized: "In this situation of loss, Seoul also put pressure on us to increase the number of operating shifts."
Unlike city buses under quasi-public ownership, community buses only receive partial loss subsidies. Seoul sets the transportation cost benchmark of each community bus at 486,098 won, and provides a subsidy of up to 230,000 won per vehicle to enterprises whose actual cost is lower than this standard. The alliance requested that the transportation cost standard be raised to 509.72 thousand won to stabilize the financial situation.
The alliance insists that if the Public Transport Transfer Agreement is not revised, it will resolutely withdraw from the system. The current agreement stipulates that fees should be settled according to the basic freight ratio, and the alliance requires that it be adjusted to a more reasonable settlement method. At the same time, it is suggested to add a clear provision on the amount of transfer losses to reduce financial support disputes in successive years.
In this regard, the municipal government of Seoul said that it has invested hundreds of billions of yuan annually to compensate for the community bus losses—subsidies of 49.5 billion yuan in 2022, 45.5 billion yuan in 2023, 36.1 billion yuan in 2024, and budget arrangements of 42.2 billion yuan this year.Seoul City officials said: “We have pledged that if companies increase operating vehicles and improve the quality of services, they will pay the benchmark for financial support at the level required by the alliance, and regret the statement of their withdrawal.”
In fact, whether the alliance will really withdraw from the exchange system is uncertain. There are analysts that the “exit” statement may be a means of putting pressure on the municipal government. Because if the exchange offer is lost, the community bus traffic is likely to decline drastically.