Korean Job Discussion Forums

[Yaya]

SEOUL, Nov. 23 (Yonhap) -- The loss South Korea's subway operators incurred due to the country's free ride program for the elderly and infirm has risen over the past five years, the home affairs ministry said Wednesday.

Senior citizens aged 65 or older, the disabled and people of "national merit" who have contributed to the country, such as war veterans, can ride the subway for free. The benefit is available in the capital city of Seoul and five major metropolitan cities -- Busan, Daegu, Incheon, Gwangju and Daejeon. At present, the basic fair for a trip is 900 won (US$0.7.

The country's seven subway operators registered a combined deficit of 343.4 billion won (US$299.5 million) last year from the free rides, accounting for 39.5 percent of their total net losses of 870.6 billion won, according to the data compiled by the Ministry of Public Administration and Security.

http://english.yonhapnews.co.kr/national/2011/11/23/94/0302000000AEN20111123003800315F.HTML

[jvalmer]

There are only a few public transportation systems worldwide that operate at a profit. I believe only 3 worldwide. Although recovering the capital costs to build the systems is usually ignored in calculating those profits, or lack of.

[pkang0202]

Those loss numbers are misleading.

Once they start charging those people, ridership among that demographic will drop SHARPLY. I'm sure some beady eyed Korean is sitting there looking at the numbers and thinking if they charged seniors money, the - just becomes a +.



Kinda like saying:

If I charge 10 people $1 for a soda, then I make $10.
If I raise the price to $2 then I'll make $20!

Its more like: If I raise the price to $2, I'll make $0 because the 10 people will jsut go someplace else.

[alwaysgood]

[nathanrutledge]

[Savant]

I support a free ride program for seniors but outwith peak working hours.

There can be just too many old people on the subway who take up a lot of seats. I would like to find a seat now and again.

[Drew345]

I always wondered why they can ride the subways for free, but not the buses. Seems like it would be the other way around. Buses are cheaper to operate than subways, I would think.

[cdninkorea]

I get giving war heroes free transit, but I'm not sure how I feel about the elderly and handicapped. It does puzzle me though why they ride the subway free but not the bus.

[akcrono]

[coralreefer_1]

The "wording" of the article is what gets me the most. I'm certainly no engineer nor otherwise very skilled in mechanics, but the idea that the subway is "losing" strikes me as odd.

First, they are describing the situation as a "loss", but I do not see it as an actual monetary loss, and much more like a "loss of potential gain"

Maybe someone can clear this up for me: Regardless of older people getting a free ride, the same number of paying people is pretty much constant. So unless there is a substantial extra cost to carry the extra weight of untold number of free riders in the form of electric y/regular maintenance to operate the train, it sounds to me like the operating company is upset not because they are actually losing money because of older riders, but upset because they are not "making" money.

If you removed every free-riding citizen on the train for a year, I don't see how it would change the ridership of paying riders. Maybe a bit more comfortable, but otherwise I don't imagine there are too many people who do not ride the subway now because of too many elderly people/not enough seats, who would suddenly begin riding otherwise.

It reminds of of a fight that my aunts had after my grandmother died. As I understand it, in my grandmothers last months, one of my aunts went to her and had her take out an "additional" life insurance policy with that aunt as the sole beneficiary. Now, maybe it was underhanded, but the other aunts did not have money "taken" from them as they were still covered in the will and existing life insurance policy...but we simply upset because they did not get the "extra" that the other aunt got. Again, not a loss, but a "loss of potential gain"

[OneWayTraffic]

[akcrono]

[coralreefer_1]

[akcrono]

I understand what you're saying, but that 65% is not from things they're doing wrong, but rather a gap in gross income and operating expenses. If there is a concern about the operating costs of the subway, it would be important to focus on both numbers (gross and costs). Anything that either increases gross (charging more people, increasing fees, etc) or decreases costs (running fewer trains, reduced upkeep, fewer employees etc) would the way to fix the situation.

I'm not fully informed on the whole situation, but I believe that the subway is intended to operate at a loss and is subsidized by tax money. It's probably impossible to really measure all of the gain that we actually get from such a good metro system, such as extra taxable revenue from businesses, better well-being and standard of living, and reduction of traffic (which also saves money in other areas of transportation).

It's also a bit dangerous to use that math the way you did to get your 259.1 million won. It is reasonable to assume (as said before), that not all of those passengers would use the subway (or use it as frequently) were it not free. The amount of money the subway would have made if they had not implemented it's free fare program would likely be less (although probably not far off) that 259.1 million.

To further complicate things, they listed PASSENGERS, not individual fares. It would seem very likely that most of those people use the subway multiple times a year (or even multiple times a day). In this case, the loss of potential gain would be much higher than 259.1 million.

Also, i believe you were comparing billions in the story to millions from your calculations (the kind of thing I do often).

[Julius]