Chairman of Seoul Taxi Association Arrested for Corruption

The chairman of the Seoul Taxi Transportation Business Association, Cha Mo (차모), aged 72, was arrested by police on June 23 for allegedly engaging in monetary transactions in exchange for appointments to association-related positions. Following his arrest, he hired two attorneys from a major law firm and filed a request for a review of the legality of his detention, which is set to be heard on June 26 at the Seoul Central District Court. Cha has reportedly denied the allegations regarding the trading of positions.

Witnesses within the association have claimed that Cha has wielded unchecked power for over a decade, often referred to as the 'Taxi King.' The closed-off power structure of the association, combined with a lack of oversight, has allegedly allowed him to engage in nepotism and favoritism.

According to our investigation, suspicions arose last June that Cha used his position as chairman to facilitate monetary exchanges related to appointments within the association. In April of the same year, over 340 members formed a group called the 'Association Reform Group' and submitted complaints to various government bodies, including the presidential office and the Ministry of Land, Infrastructure and Transport, alleging that Cha was soliciting bribes in exchange for job placements.

In October, the Seoul Metropolitan Police Agency's special investigation unit conducted searches at the association's headquarters in Songpa District and at Cha's residence, reportedly uncovering bundles of cash amounting to several hundred million won. Authorities suspect that this money may have been received by Cha in return for granting favors to association members.

Several members have recently testified to the police that Cha demanded money in exchange for appointments within the association. The police have reportedly gathered some statements regarding the amounts requested. However, Cha has claimed that the cash found was not related to bribes but rather proceeds from a real estate sale. His attorney stated that it would be inappropriate to disclose specific positions ahead of the review of his detention.

The Seoul Taxi Association is the largest organization representing individual taxi drivers in South Korea, with approximately 49,074 members as of February. Each member pays a monthly fee of 20,000 won, contributing to an annual budget of around 15 billion won. Due to restrictions on the number of taxi licenses issued by local governments, new drivers must obtain licenses from departing drivers, a process managed by the association. Members have expressed that, despite being independent operators, they cannot operate without the association's approval, highlighting its significant influence.

Cha, who obtained his taxi license in 1986, has held various positions within the association, including delegate in 1998 and head of the Gangnam branch in 2002, before becoming chairman in 2005. The association's bylaws state that the chairman can serve only one additional term, yet Cha has reportedly been re-elected multiple times through by-elections, serving a total of 15 years.

The chairman holds considerable power within the association, including the authority to discipline members, which can include expulsion. One taxi driver remarked that the chairman essentially controls their livelihoods. The chairman's annual salary is reported to be between 130 million and 140 million won, with an additional operational budget of around 50 million won.

As the construction industry faces downturns and domestic demand weakens, many baby boomer retirees are entering the taxi industry, further increasing the association's influence. The value of taxi licenses has risen significantly, from 93.81 million won in the second half of 2023 to over 100 million won last month.

A representative from the Seoul Taxi Association noted that the chairman can appoint over twenty key positions without any formal decision-making process, and when including various positions that come with allowances for attending meetings, the total exceeds one hundred.

In 2021, several officials from the Seoul Taxi Association were indicted for fraudulently claiming vehicle repair costs, while in 2023, it was revealed that officials received bribes for directing work to specific companies. Internally, there are calls for the government to implement oversight mechanisms, as the association, originally established to protect the rights of individual taxi drivers, is perceived to operate in a closed and authoritarian manner.