Is the sharing economy dying in Korea? Debate over platform businesses amid carpool controversy
- 5 years ago
The rift between carpool companies and taxi unions reached boiling point last month, with thousands of cab drivers protesting against Kakao's upcoming ride-sharing app.
It has sparked a debate on whether the government should encourage the growth of sharing economy platforms.... or continue protecting traditional businesses and workers.
Oh Soo-young help us hear both sides of the argument.
Korea's number one carpool app was forced to downsize drastically this year, laying off 70 percent of its employees.
It has faced legal hurdles and lawsuits, preventing it from growing further.
"In other countries, they have huge carpool firms with a range of services like letting passengers transfer to public bicycles. We also want to grow, but due to murky regulations, we couldn't try even ten percent of what we'd like to achieve."
"Korea was once seen as one of the global centers of the sharing economy, encouraging the growth of platform firms. But now those companies are questioning whether the sharing economy is dying in Korea due to red-tape and opposition from traditional businesses.""
The transport laws currently ban the commercial use of private vehicles -- except during commuting hours which haven't been specified.
Calls for regulatory reform have been drowned out by the cries of taxi unions who worry that car and ride-sharing platforms will drive down income, and take away drivers' jobs.
There are other unresolved issues,... such as liability in the case of accidents,... as well as verifying the safety of the vehicle and its occupants.
Home-sharing is another sector that's experiencing legal setbacks.
Under Korean law, homeowners can only rent out their spaces to foreigners, not domestic travelers.
Airbnb, last month, launched a petition to revise this act,... but other accommodation businesses are worried.
"With new services like Airbnb, the market share of traditional accommodation and room prices are falling. Also, many venues listed on the platforms don't meet safety standards like having fire exits, nor do they pay taxes on their income. We need more crackdowns on such cases."
Sharing platforms argue that the bar is set too high, compared to other countries,... and that they're actually expanding the market.
"People go to a hotel and stay one or two nights whereas a lot of our guests stay longer than five nights. Some travel with family, some need a kitchen where they cook their own food so we want to provide different options for different travelers."
While the debate rages on,... most industry analysts say change is inevitable for both platform firms and traditional firms.
"Even if we block services like Uber or Airbnb from operating, there'll be some other innovative service challenging our current industrial landscape. The government should take action considering various conditions and trends in an industry-specific manner."
Finance Minister Kim Dong-yeon last week stressed the need to foster the sharing economy -- de
It has sparked a debate on whether the government should encourage the growth of sharing economy platforms.... or continue protecting traditional businesses and workers.
Oh Soo-young help us hear both sides of the argument.
Korea's number one carpool app was forced to downsize drastically this year, laying off 70 percent of its employees.
It has faced legal hurdles and lawsuits, preventing it from growing further.
"In other countries, they have huge carpool firms with a range of services like letting passengers transfer to public bicycles. We also want to grow, but due to murky regulations, we couldn't try even ten percent of what we'd like to achieve."
"Korea was once seen as one of the global centers of the sharing economy, encouraging the growth of platform firms. But now those companies are questioning whether the sharing economy is dying in Korea due to red-tape and opposition from traditional businesses.""
The transport laws currently ban the commercial use of private vehicles -- except during commuting hours which haven't been specified.
Calls for regulatory reform have been drowned out by the cries of taxi unions who worry that car and ride-sharing platforms will drive down income, and take away drivers' jobs.
There are other unresolved issues,... such as liability in the case of accidents,... as well as verifying the safety of the vehicle and its occupants.
Home-sharing is another sector that's experiencing legal setbacks.
Under Korean law, homeowners can only rent out their spaces to foreigners, not domestic travelers.
Airbnb, last month, launched a petition to revise this act,... but other accommodation businesses are worried.
"With new services like Airbnb, the market share of traditional accommodation and room prices are falling. Also, many venues listed on the platforms don't meet safety standards like having fire exits, nor do they pay taxes on their income. We need more crackdowns on such cases."
Sharing platforms argue that the bar is set too high, compared to other countries,... and that they're actually expanding the market.
"People go to a hotel and stay one or two nights whereas a lot of our guests stay longer than five nights. Some travel with family, some need a kitchen where they cook their own food so we want to provide different options for different travelers."
While the debate rages on,... most industry analysts say change is inevitable for both platform firms and traditional firms.
"Even if we block services like Uber or Airbnb from operating, there'll be some other innovative service challenging our current industrial landscape. The government should take action considering various conditions and trends in an industry-specific manner."
Finance Minister Kim Dong-yeon last week stressed the need to foster the sharing economy -- de