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Korea Herald
13-05-2025
- Business
- Korea Herald
Seoul bus ridership drops 19% in 10 years even as city spends billions in subsidies
Seoul's public buses are carrying fewer passengers than they used to, and the city is paying billions to cover their losses, data shows. Over the last 10 years, average daily bus ridership in Seoul has fallen by 19 percent, from 4.57 million in 2014 to 3.73 million in 2024, according to official city data released in April. 'Maeul' buses, smaller vehicles that operate on shorter, community shuttle routes, saw an even steeper drop, down one-third over the same period, from 1.22 million to 840,000 passengers per day. As losses mount, the Seoul Metropolitan Government is spending tens of billions of won to support bus companies. Between 2021 and 2024, the city poured nearly 2.48 trillion won ($1.75 billion) into bus company subsidies under its long-running semi-public system. The model, introduced in 2004, allows private companies to operate city buses while guaranteeing that the government will cover operating losses. Public transportation still handles about 65 percent of all travel in Seoul, but how people use it is changing. From 2012 to 2022, the share of trips made by bus dropped from 27.4 to 20.7 percent. In contrast, subway usage rose from 38.2 to 44.7 percent, showing a growing preference for rail over road-based transit. A 2024 report by the Seoul Institute, a city-backed think tank, points to several reasons behind the drop: increasingly irregular bus intervals, growing car ownership and the popularity of personal mobility options like electric scooters. Meanwhile, the structure of the bus system itself has barely changed since a major overhaul in 2004. At the same time, the number of buses on the road has not decreased. In fact, there are now 7,382 city buses operating in Seoul, over 1,100 more than the Seoul Institute's earlier recommendation of 6,252, based on 2012 demand levels. And most bus routes are running at a loss. In 2019, a government audit found that 405 out of 437 city bus routes — over 92 percent — were unprofitable, compared to 85 percent in 2012. Still, cutting back is not easy. Korean law treats bus route licenses as property rights, which makes it legally difficult for the city to adjust or revoke them, even if ridership drops. Meanwhile, some private equity firms have acquired bus companies and continued drawing dividends despite public subsidies. In one case, a firm paid out over 4 billion won to shareholders by tapping into its reserves. The city now plans to tighten oversight and limit excessive payouts. As part of broader reforms announced in October, Seoul is also capping reimbursements for fuel and driver wages and shifting to a preset subsidy model instead of covering deficits after the fact. Officials estimate these changes could save 60 billion won a year. The challenge lies in cutting costs without cutting off access for the city's most transit-dependent populations. 'Public transport isn't only about profit,' said Hong Sang-yeon, lead researcher of the 2024 report at the Seoul Institute. 'For people in low-income areas and neighborhoods without subway access, buses aren't optional, they're a lifeline.' mjh@
Korea Herald
13-05-2025
- Business
- Korea Herald
Seoul bus ridership drops 19% in 10 years even as city spends billions in subsidies
Seoul's public buses are carrying fewer passengers than they used to, and the city is paying billions to cover their losses, data shows. Over the last 10 years, average daily bus ridership in Seoul has fallen by 19 percent, from 4.57 million in 2014 to 3.73 million in 2024, according to official city data released in April. 'Maeul' buses, smaller vehicles that operate on shorter, community shuttle routes, saw an even steeper drop, down one-third over the same period, from 1.22 million to 840,000 passengers per day. As losses mount, the Seoul Metropolitan Government is spending tens of billions of won to support bus companies. Between 2021 and 2024, the city poured nearly 2.48 trillion won ($1.75 billion) into bus company subsidies under its long-running semi-public system. The model, introduced in 2004, allows private companies to operate city buses while guaranteeing that the government will cover operating losses. Public transportation still handles about 65 percent of all travel in Seoul, but how people use it is changing. From 2012 to 2022, the share of trips made by bus dropped from 27.4 to 20.7 percent. In contrast, subway usage rose from 38.2 to 44.7 percent, showing a growing preference for rail over road-based transit. A 2024 report by the Seoul Institute, a city-backed think tank, points to several reasons behind the drop: increasingly irregular bus intervals, growing car ownership and the popularity of personal mobility options like electric scooters. Meanwhile, the structure of the bus system itself has barely changed since a major overhaul in 2004. At the same time, the number of buses on the road has not decreased. In fact, there are now 7,382 city buses operating in Seoul, over 1,100 more than the Seoul Institute's earlier recommendation of 6,252, based on 2012 demand levels. And most bus routes are running at a loss. In 2019, a government audit found that 405 out of 437 city bus routes — over 92 percent — were unprofitable, compared to 85 percent in 2012. Still, cutting back is not easy. Korean law treats bus route licenses as property rights, which makes it legally difficult for the city to adjust or revoke them, even if ridership drops. Meanwhile, some private equity firms have acquired bus companies and continued drawing dividends despite public subsidies. In one case, a firm paid out over 4 billion won to shareholders by tapping into its reserves. The city now plans to tighten oversight and limit excessive payouts. As part of broader reforms announced in October, Seoul is also capping reimbursements for fuel and driver wages and shifting to a preset subsidy model instead of covering deficits after the fact. Officials estimate these changes could save 60 billion won a year. The challenge lies in cutting costs without cutting off access for the city's most transit-dependent populations. 'Public transport isn't only about profit,' said Hong Sang-yeon, lead researcher of the 2024 report at the Seoul Institute. 'For people in low-income areas and neighborhoods without subway access, buses aren't optional, they're a lifeline.'
