1. Increasing Social Cost: Traffic Congestion and Environmental Pollution

By 2002 when public transportation reform began to be discussed, Seoul’s general traffic condition, despite continuous supply of infrastructure (such as road and subway construction), had continued to worsen due to the increasing number of registered vehicles and single occupancy vehicles, parking problems, and unregulated bus operation. Before the reform, private cars were identified as a major cause of traffic congestion since they were responsible for 72% of the traffic volume and 79% of them were occupied by a single driver. The resulting social costs were substantial. The losses to the economy due to the severe traffic congestion and fuel costs for driving were estimated at KRW 5 trillion and KRW 4.1 trillion per year, respectively.

2. Vicious circle of bus problems

Along with the opening of the subway system, more people gained affluence to own their cars, so the number of bus passengers continuously decreased. In 2003, when the Seoul city government began its push for transportation reform, bus operations were already in decline with the number of bus companies decreasing to 57, from 103 in 1997. Operators competed to secure profitable routes and avoided operation of unprofitable routes, resulting in more inconvenience to passengers. The competition for dwindling profits became so fierce that it was a frequent occurrence to see bus routes being abolished overnight.The service quality worsened as bus drivers squeezed as many passengers as possible onto the reduced buses, accompanied by other problems such as reckless driving, refusal to carry elderly or disabled passengers, and passing without calling at bus stops. Because of the inadequate service quality, people stretched their budget to buy their own cars. In turn, automobile ownership continuously increased, which caused extreme traffic congestion. Road congestion further lowered the speed and punctuality in bus operation. Citizens gradually became reluctant to use buses, and the transport share of buses tended to decrease year by year, dropping from 30.7% in 1996 to 26.7% in 2002. It created the vicious circle where bus companies worsening finances led to fare hikes and poorer service.

3. Limits of gradual approach in improving public transportation

There had been attempts to renovate the public transportation system in the past, but they often ended as temporary measures to solve a pending issue, revealing the limit in tackling fundamental issues of the bus system. In 1997, the Seoul city government pushed forward comprehensive countermeasures for the city bus system, but it was suspended due to the Asian financial crisis occurring at the time. By the 2000s, efforts to improve management and service through the introduction of bus route bidding and service quality evaluation system took place, but they had limited impacts. To achieve a significant improvement, a radical reform was necessary.

1. Introduction of quasi-public bus system: restructuring of administrative management system for bus operation.

The core concept of the quasi-public bus system was to transform bus routes and operational system to serve public interests. The Seoul city government secured the right to adjust bus lines, and pursued the public welfare of bus services as well as the improvement at the service level. At the same time, it introduced competition elements in some of the management system to enhance the operation efficiency. Besides, the Seoul municipality introduced competition to the industry by putting out to public tender the operation of some trunk lines and pursued customer service innovation to subsidize the bus companies for their employee benefits.

2. Technical reform of bus routes

2.1. Improvement to bus routes and installation of transfer terminals

The Seoul city government divided bus routes into trunk lines for inter-regional and medium- to long-distance journeys, and feeder lines for short journeys within each region. Depending on the function, buses were divided into interregional (red), trunk (blue), feeder (green) and circular (yellow) lines. By reorganizing the bus lines, the city aimed to enhance mobility, accessibility and convenience of bus services. It also ensured to facilitate transfer between feeder, circular lines and trunk lines and focused on enhancing accessibility to meet the intra-regional demand. Reinforcing the efficiency of operations was one important consideration, too. Transfer terminals were thus installed at major junctions like Cheongnyangni to make it easy to transfer from bus to bus and from bus to subway.

2.2 Introduction of the exclusive median bus lane system

Median bus lanes were thus introduced as part of the bus reform in 2004 to improve the speed, punctuality, and operation efficiency. The sites were selected by taking into account the number of lanes, degree of overlapping with subway lines, concentration of traffic demands, inflow and outflow of traffic volume, and bus traffic volume per hour. Particularly, median bus lanes were installed where there more than three lanes in each direction were available with high traffic demand so as to connect major cities outside Seoul with centers and sub-centers of Seoul.

2.3 Reduction of public transportation fares: from charging per ride to a trip-distance basis

Before the reform, each public transportation means charged a flat rate per ride regardless of the traveling distance. The reform substantially lowered the average fare as it set up a system to charge passengers based on the combined distance traveled. To enable this, transfers from bus to bus and even to subways was allowed for free. As for the technical feasibility, the smart card system was introduced to analyze whether an individual passenger made a transfer or not and how long the traveling distance was. With the introduction of this distance-based charging system, the citizens were found to pay about 30% less fares for public transportation service on average. Even if a passenger travels a long distance with multiple transfers, the system was designed to charge less than the old way of charging per each ride

2.4 Establishment of information systems to support the operation of public transportation and improvement in facilities and vehicles.

For the new public transportation system, a platform for traffic information was necessary. To integrate and process the information collected from related organizations, TOPIS (Seoul Transport Operation and Information Service: http://policytransfer.metropolis.org/case-studies/topis-the-control-tower-for-seoul-city-s-transportation-system) as well as BMS (Bus Management System) and BIS (Bus Information System) were established. Additionally, a new transportation card system was set up to recognize whether a passenger has made a transfer and how long the travel distance was. Although a transportation card system was already out there, nearly 25 percent of passengers still opted to pay by cash as it only functioned as a means of paying fares. Hence, the new transportation card, Smart Card, was introduced with additional functions of convenience and security such as settlement service for convenience stores, parking lots and online shopping malls. Proactive efforts were also made to promote the use of the Smart Card as it was expected to bring greater transparency of management to the bus industry.

1. Citizen-oriented public transport operation

The quasi-public bus system enabled adjustment of bus routes to serve citizens’ needs, not stakeholders’ interests. In the past, bus lines were hard to adjust due to a strong opposition from bus operators who already had licenses for profitable lines. Even if the routes were adjusted, profits for bus operators often mattered, and citizens’ convenience was not a priority. After the reform, previous lengthy and circuitous routes were abolished and the hierarchical systems of trunk and feeder bus lines were established. These measures reinforced the connectivity between routes and offered more options in passengers’ choice of routes, which made bus services more convenient. Increased public welfare in bus services secured stability in bus service provisions in previously neglected areas and in turn enhanced the equity of the public transportation service. In addition, scientific route adjustment became possible through advanced smart bus management system such as BMS

2. Improved safety and comfort due to safer bus operation through the quasi-public system

Revenue pool management system enhanced bus drivers’ working conditions and relieved excessive competition among bus operators, which practically improved the service quality. Reckless driving disappeared and drivers’ attitude for passengers significantly improved. In terms of traffic safety, safe driving was enhanced, causing a sharp decline in traffic accidents .

3. Improvement in the traffic speed and punctuality

Through median bus lanes and reasonable route adjustments, the speed of buses in the peak time increased by 30% on average (10 ~ 80% depending on the section). Traffic speed increased not only in median bus lanes, but buses in regular lines also became faster. In addition, punctuality of bus service improved thanks to increased speed in the median bus lane, scientific bus management with BMS, and relieved competition among bus operators through quasi-public system.

4. Increase in citizen satisfaction

After the reform, citizen’s satisfaction degree for the public transport significantly increased. According to research conducted by the Seoul Development Institute in June 2005, the satisfaction rate increased from 14.2% to 36.9% after the reform. Major factors contributing to the satisfaction of consumers were ‘discounted transfer fare’ and ‘connection between subway and bus,’ while dissatisfied consumers pointed out ‘fare increase’ and ‘elimination of previous bus line’.

5. Increase in public transit ridership

The integration between bus and subway systems brought about increases in ridership of both. Particularly, town bus ridership surged because the integrated fare system (offering transfer discount) motivated people to use town buses, rather than walking, when approaching nearby subway stations or other bus stops. Increased ridership resulted in 10.3% revenue growth. The city saw an increase in transfer rate after the reform, particularly a sharp one in bus transfer rate. This suggests that the lower costs of transfer enabled the passengers to choose the most reasonable means of transportation.

6. Increase in bus drivers’ wage

Before the reform, city bus drivers’ wage level was generally lower than other workers in the similar industries. Intra-city bus drivers got paid 37% and 50% less than express bus drivers and subway drivers respectively. Such low salaries led to manpower shortages and service quality decline. Through the quasi-public system, the Seoul city government guaranteed a reasonable level of profits to the bus industry and hiked the salaries of city bus drivers. These changes are credited as enhancing the bus service quality as well as the employment stability of the drivers.

1. Opposition from all the stakeholders

The city once attempted a trial service in northeastern Seoul but it fell through in the face of strong resistance from many stakeholders. However, the Seoul municipality along with the citizens committee endeavored to persuade the interested parties about the necessity of the bus reform, and embraced their opinion to supplement and improve the reform plan. Such an effort continued through the year from mid 2003, when the Seoul city government gave up the pilot project in the northeastern region of Seoul, to June 2004, when the reform was implemented.

2. Integration of fare system with external agencies

The living zones in Seoul are not limited to the administrative boundary of Seoul Metropolitan Government, but highly integrated with other administrative areas such as Incheon and Gyeonggi-do. Since the integration of fare system could not be decided exclusively by the Seoul Metropolitan Government, consultation with relevant administrative agencies was necessary. In particular, the project could not even begin without their agreement on whether to join the integrated fare system and on the proposed increase of the basic fare. Raising the basic fare was unavoidable to implement the new fare system, but the Korea Railroad Corporation expressed opposition, concerned that doing so would reduce profits. After the Seoul municipality’s continuous persuasion, the Korea Railroad eventually agreed to the raise and the integrated fare system at the risk of losing money. Meanwhile, the Incheon Transit Corporation argued that the introduction of a distance-based fare system would increase burdens to long-distance passengers. Through several rounds of negotiations, basic distance and additional distance for long-distance passengers were decided to be adjusted rather than for passengers to suffer extra fare hikes. It took even more time to secure participation by the Gyeonggi-do province and Incheon city. Finally, the integrated fare system was able to begin operation in July 2004 for Seoul and then expanded the scope in phases for Gyeonggi-do province and Incheon city respectively in July 2007 and 2009.

The bus reform of Seoul would have been impossible without the persuasion of stakeholders through the Bus Reform Citizens Committee, a public-private governance entity. In addition, effective planning through the cooperation between the Seoul Metropolitan Government and the Seoul Development Institute was an important factor for the success. In particular, the main direction of the reform, devised through combining practical alternatives of the city officials and researchers’ ideal items, constitutes the backbone of Seoul’s current public transportation system. The bus reform in Seoul shows the importance of collaborative planning and communication with stakeholders in the development of transportation policy. In retrospect, the failure of trial service in northeastern Seoul was a blessing in disguise since it triggered the interests and participation of civic groups and triggered the establishment of the Bus Reform Citizens Committee. However, the failure also implies that the full-scale reform with synergy effects sometimes could be more effective than the experimental attempt for limited areas in reorganizing the public transit system. Throughout the process of the reform, the Seoul city government’s continuous efforts to persuade stakeholders and relevant organizations are noteworthy. With the infrastructures established throughout many years and complicate interests conflicting around, Seoul should and will continue its strenuous efforts to secure stronger social support and further innovate the transport system.

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