Seoul Metro has officially requested hundreds of millions of EUR from the South Korean government to cover losses resulting from the free-ride system mandated by law for certain groups, such as pensioners and veterans, stating that it can no longer bear this cost on its own. This is the first time a South Korean urban metro operator has submitted an official request to central authorities specifying the exact amount it deems necessary.
The company has sent official letters to the Ministry of Economy and Finance, the Ministry of Land, Infrastructure, and Transport, the Ministry of Health and Welfare, and the Ministry of Patriots and Veterans, requesting both the inclusion in the law of the possibility of funding from the state budget and direct financial support.
In its request, the operator states that if the amendment to the Urban Railways Act, currently under debate in the National Assembly, and other relevant legislation is delayed, the state should cover the amount of 576.1 billion won (EUR 328.4 million) from public funds.
Seoul Metro is requesting treatment similar to that applied to KORAIL
According to the company, the requested amount represents 74.3% of the total losses incurred last year due to free rides for the six urban rail operators in South Korea — Seoul, Busan, Daegu, Incheon, Gwangju, and Daejeon. Nationwide, these losses amounted to 775.4 billion won (approximately EUR 442 million).
Seoul Metro claims that the 74.3% figure corresponds to the average compensation rate granted over the past nine years to the national company KORAIL for costs related to public service obligations (PSO), under South Korean railway legislation.
The company also provides a concrete example: at the Sindorim station, if a passenger eligible for free travel passes through the gates for Line 1, operated by KORAIL, the loss is compensated by the state. If the same passenger uses the gate for Line 2, managed by Seoul Metro, the cost is borne entirely by the local operator.
Losses from free rides exceed half of the total net loss
Data presented by Seoul Metro shows that last year, the total net loss of the six urban operators was 1.4875 trillion won (approximately EUR 847.9 million). Of this amount, 775.4 billion won (EUR 442 million), or 52.1%, came from the free ride scheme.
Among all operators, Seoul Metro recorded the largest loss from free rides, amounting to 448.8 billion won (approximately EUR 255.8 million).
The company also says its accumulated deficit has reached 19.749 trillion won (approximately EUR 11.26 billion).
An outdated scheme in a rapidly aging society
The free-ride system was introduced in 1980 by presidential decree and became a full fare waiver for people 65 and older following the amendment of the Elderly Welfare Act in 1984.
Seoul Metro points out that, at that time, the population’s aging rate was only 4%, while this year it has reached 21.2%. According to projections by Statistics Korea, this percentage is expected to rise to 40.1% by 2050.
The company uses this argument to show that the current system was built in a completely different demographic context and that the financial pressure on urban transit operators has increased significantly.
Lawsuit Against the Ministry of Patriots and Veterans
Meanwhile, on April 15, the first hearing was held in the lawsuit filed by Seoul Metro against the Ministry of Patriots and Veterans, in which the company is seeking recovery of 3.7 billion won (approximately EUR 2.1 million) representing the cost of free rides for beneficiaries in the categories of veterans and state-decorated individuals.
At the hearing, the operator argued that when the state compels other entities to perform tasks that fall under its own responsibility without providing compensation, serious operational difficulties arise. The company also requested the adoption of legal provisions to guarantee fair compensation.
According to Seoul Metro, the ministry currently subsidizes free rides for veterans for all national bus transport associations, as well as for KORAIL and SR, but not for the Seoul Metro operator.
Pressure to change the law
The head of Seoul Metro’s planning department, Han Younghee, stated that the social benefits generated by the free-ride system are attributed to the state, not the company, and called for public support to amend the legislation and introduce government funding.
The operator’s message is clear: without legislative changes and without compensation from the state budget, the sustainability of the current system will become increasingly difficult to maintain amid the rapidly aging population.
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