CONTENTS
- 1. Passenger Transport Service Act | Purpose of Enactment and Scope of Application
- - Key Terms of the Passenger Transport Service Act
- 2. Passenger Transport Service Act | Key Contents of the Passenger Transport Service Act That Companies Must Know
- - Passenger Transport Service Act | Key Practice Areas
- 3. Passenger Transport Service Act | Disadvantages of Violation
- 4. Passenger Transport Service Act | The Importance of Compliance and the Prevention of Legal Risk
- - Passenger Transport Service Act Compliance Inspection Checklist
1. Passenger Transport Service Act | Purpose of Enactment and Scope of Application
The full title of the statute is the “Passenger Transport Service Act,” a law governing the passenger motor vehicle transport business.
The Act governs the operation of businesses tied to the modes of transport people use every day, including passenger motor vehicles such as buses and taxis, motor vehicle rental businesses such as car rental and car sharing, and passenger terminal businesses such as intercity and express bus terminals.
It lays out detailed rules on the requirements for issuing and revoking licenses by type of transport business and on permit and authorization procedures, and it spells out the obligations operators must meet along with the legal sanctions for failing to do so.
The Act aims to protect the safety and convenience of passengers, to keep order in passenger transport, and to advance public welfare.
It addresses matters such as the categories of passenger motor vehicle transport business, operator registration, transport order, safe operation, transport revenue, and the management of transport workers, and it applies to passenger motor vehicle transport businesses across the country, including buses, taxis, chartered buses, and rental cars.
Operators can reduce legal risk only by understanding the scope of the Act precisely and by knowing the rules that apply to each business type.
Because attention has turned in particular to the legal status of platform transport businesses and to grounds for sanctions that preserve transport order, operators should update their internal rules promptly to reflect the amended provisions.
Key Terms of the Passenger Transport Service Act
Term | Definition |
|---|---|
Motor vehicle | Passenger cars, multipurpose vehicles, and special-purpose vehicles under Article 3 of the Motor Vehicle Management Act (camping vehicles are limited to the motor vehicle rental business) |
Passenger transport service business | A general term covering the passenger transport business, the motor vehicle rental business, the passenger terminal business, and the passenger transport platform business |
Passenger transport business | A business that carries passengers for a fee in response to the demand of others, such as buses and taxis |
Motor vehicle rental business | A business that rents out motor vehicles for a fee, such as rental cars |
Passenger terminal | A facility set up for the boarding, alighting, and parking of passengers, other than on the road surface or in general traffic areas |
Passenger terminal business | A business that provides a passenger terminal for use in the passenger transport business |
Passenger transport platform business | A business that matches passengers' transport demand through a transport platform such as an app or website, such as platform taxis and hailing apps |
2. Passenger Transport Service Act | Key Contents of the Passenger Transport Service Act That Companies Must Know
The Passenger Transport Service Act sets out what an operator needs in order to run a business, including license registration, the designation of business areas, and the filing of terms and conditions, so anyone who plans to operate a passenger transport business should know it thoroughly.
The key points of the Act that companies should know are as follows.
Passenger Transport Service Act | Key Practice Areas
1. License and Registration Obligation (Article 4)
Operating without a license carries legal penalties, so a careful license review in advance matters greatly when entering the market or expanding the business.
2. License Standards and Supply-Demand Adjustment (Articles 5 to 5-3)
During a supply-demand adjustment, registration may be restricted for up to three years and extended in two-year increments, so companies should anticipate this and build a response strategy when planning their business.
3. Grounds for Disqualification (Article 6)
Checking these grounds matters just as much when acquiring a business, forming a new corporation, or changing officers.
4. Commencement of Transport and Change of Business Plan (Articles 7 and 10)
A change to the business plan generally requires authorization from, or a filing with, the Ministry of Land, Infrastructure and Transport or the Mayor/Do Governor, and some items may be handled by a filing as a minor change.
5. Filing of Fares and Charges (Article 8)
Once the filing acceptance period passes, the filing is treated as automatically accepted; even so, a legal review in advance can help set appropriate fares and head off disputes.
6. Transport Terms and Conditions and Joint Transport Agreements (Articles 9 and 11)
Before signing such a contract, the operator should review its legal validity and the conditions that will bind the business.
7. Prohibition of Name Lending and Illegal Operation (Article 12)
Such conduct is treated as unlawful when a business operation is transferred or entrusted, and strong sanctions apply, so operators should manage the risk of name lending closely.
8. Business Transfer, Merger, and Inheritance (Articles 14 to 15)
Inheritance likewise requires a filing within 90 days, and the status passes only after the grounds for disqualification are reviewed.
For these reasons, managing the risks tied to mergers, acquisitions, and inheritance deserves close attention.
9. Filing of Suspension and Discontinuation of Business (Article 16)
The operator must also post the suspension or discontinuation at the business office, so legal procedures still apply even when operations stop.
10. Other Provisions That Companies Should Know
Management and Service Evaluation (Article 20): Evaluations of management performance and service quality may be tied to public announcement, commendation, and financial support, so service quality carries real weight for a company's image.
Vehicle Marking Obligation (Article 17): The operator must mark its name, symbol, and similar identifiers on the exterior of the vehicle.
Transport of Small Cargo (Article 18): Mail, newspapers, and passenger cargo may be carried on an incidental basis, but only in line with the standards set by Ordinance of the Ministry of Land, Infrastructure and Transport.
3. Passenger Transport Service Act | Disadvantages of Violation
A violation of the Passenger Transport Service Act can draw both criminal punishment and administrative dispositions.
The consequences of violating the Act are as follows.
Type of Violation | Criminal Punishment | Administrative Disposition |
|---|---|---|
Unregistered passenger motor vehicle transport business | Imprisonment for up to 2 years or a fine of up to KRW 20 million | Suspension of vehicle operation or revocation of registration |
Unregistered motor vehicle rental business | Suspension of business or revocation of registration | |
Illegal transport for consideration | Suspension of platform operation or cancellation of filing | |
Unfiled transport platform business | Imprisonment for up to 1 year or a fine of up to KRW 10 million | Suspension of business or penalty surcharge |
Violation of a transport business operator's prohibition on entrusting transport | Suspension of business or revocation of registration | |
Violation regarding stops and boarding/alighting | A fine of up to KRW 5 million | Suspension of vehicle operation, suspension of business |
4. Passenger Transport Service Act | The Importance of Compliance and the Prevention of Legal Risk
The Passenger Transport Service Act imposes strict rules across an entire business, covering business permits, whether transport is provided for a fee, the operation of platform services, and the management of transport workers.
Unregistered operation, illegal transport for a fee, drunk driving, and failure to meet license requirements may lead to criminal punishment and administrative dispositions, and they can put the survival of a business in doubt.
For that reason, transport operators benefit from building a legal risk checklist and setting up systems to monitor amended statutes, train transport workers, and seek regular advice from legal professionals.
Passenger Transport Service Act Compliance Inspection Checklist
1. Business Registration and License Matters
Inspection item | Inspection details | Inspection result |
|---|---|---|
Whether the business license and registration certificate are kept on site | Whether the passenger transport business registration certificate and license are kept at the place of business and in the vehicles | □ Yes / □ No |
Confirmation of the scope of the transport business | Whether the operator stays within the transport scope allowed under the license, covering route, use, and vehicle type | □ Compliant / □ In violation |
Confirmation of the prohibition on chartered bus and rental car transport for a fee | Whether any unregistered or unpermitted transport for a fee takes place, including the use of rental cars for paid transport | □ No / □ Yes |
2. Inspection of Whether Transport Is Provided for a Fee
Inspection item | Inspection details | Inspection result |
|---|---|---|
Whether a transport-for-a-fee contract exists | Whether a contract with the passenger is prepared and kept when transport is provided for a fee | □ Yes / □ No |
Whether illegal call vans or tour vehicles are operated | Whether a transport-for-a-fee platform or call van service runs without a permit | □ No / □ Yes |
3. Vehicle and Safety Management Matters
Inspection item | Inspection details | Inspection result |
|---|---|---|
Whether periodic and daily inspection records are kept | Whether vehicle periodic inspections and pre-operation inspection sheets are prepared and kept | □ Yes / □ No |
Whether insurance has been obtained | Confirmation of bodily injury, property damage, and own-vehicle insurance, as well as commercial-use insurance | □ Yes / □ No |
Installation and inspection of tachographs | Installation of tachographs in buses and chartered buses and their periodic inspection | □ Completed / □ Not installed |
4. Management of Transport Workers
| Inspection item | Inspection details | Inspection result |
|---|---|---|
| Training to prevent drunk and unlicensed driving | Whether training to prevent unlawful conduct such as drunk driving and speeding takes place | □ Conducted / □ Not conducted |
| Guidelines prohibiting mobile phone use while driving | Whether transport workers are informed of the rules they must observe and whether a written pledge is signed | □ Completed / □ Not conducted |
5. Operation of the Platform Transport Business (Call Vans and App Taxis)
Inspection item | Inspection details | Inspection result |
|---|---|---|
Whether a platform transport business license is held | Whether the platform transport license is registered, such as Kakao T Blue | □ Registered / □ Not registered |
Management of operation records and contract matters | Whether operation details, fares, and contract records are kept and reported | □ Completed / □ Not performed |
Insurance enrollment and safe-driving training | Whether transport workers have obtained insurance and completed statutory training | □ Performed / □ Not performed |
6. Management of Administrative Disposition History
Inspection item | Inspection details | Inspection result |
|---|---|---|
Administrative disposition history within the past 3 years | Whether there have been dispositions such as penalty surcharges, license revocation, suspension, or warning, and the grounds for them | □ No / □ Yes |
Measures to prevent recurrence of violation cases | Whether measures to prevent recurrence are put in place when an administrative disposition history arises | □ Completed / □ Not performed |
7. Reflection of Statutory Amendments
Inspection item | Inspection details | Inspection result |
|---|---|---|
Confirmation of recent statutory amendments | Whether amendments to the Passenger Transport Service Act within the past year have been reflected | □ Confirmed / □ Not confirmed |
Notice of amendment contents to all staff | Whether training and notice on the amendments are provided | □ Completed / □ Not performed |
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