Seoul City Introduces Fines of up to 500,000 Won for Illegally Parked Shared E-scooters

The Seoul Metropolitan Council has passed an amendment to the ordinance on towing illegally parked shared e-scooters.

Under the amended ordinance, which passed on May 6, a device left in a no-parking zone will be towed at the operator's expense of 40,000 won (US$36) if it is not collected within three hours after reporting. In addition, a storage fee of up to 500,000 won (US$445) can be charged to the operator for the towed e-scooter.

Seoul has been regarded as a test market for the shared mobility business. Yet it is now expected to become a market that is difficult to enter without sufficient funds and an unrivaled service strategy due to a reckless entry of companies and strong regulations.

Recently, Seoul city has been working with T-money, a public transportation payment service provider, to develop a public online system that allows citizens to immediately report an illegally parked e-scooter through a mobile website. Seoul city is also considering embedding this system in portal site apps to make it more convenient for users to report.

The Seoul Metropolitan Government made this decision as citizens' inconvenience caused by randomly parked e-scooters has increased. In fact, the number of civil petitions related to e-scooters filed with the city increased from 44 in 2019 to 235 last year.

According to a survey by the Seoul city in September last year, the total number of shared e-scooters operating in Seoul was about 35,850 units, more than double the 16,580 units four months ago.

In line with the rapid growth, some companies are lowering usage fees to compete. Industry insiders say that Seoul is a market less profitable than cities in the United States or Europe, as the unlock fee of a shared e-scooter is less than US$1 (1,200 won). In fact, the fee for riding the main shared e-scooter in Seoul is about 850 won on average.

Meanwhile, the revised ordinance, which imposes fines only on operators, regardless of the reasons attributable to the actual riders, is expected to increase the burden of shared e-scooter operators, mostly small and medium-sized businesses.

An industry insider said, “The number of shared e-scooters in Seoul has increased sharply for a short period of time making the city a saturated market. If the fine, which is at an unprecedentedly high level, is applied, Seoul will become a more difficult market and operators will not be able to provide free-floating services for the last mile with affordable prices anymore."

With strong IT infrastructure and a high population density, Seoul is attractive to investors and shared e-scooter companies. However, fierce competition and the local government's regulations have made it a market less profitable than overseas cities.