Ulsan's city bus system is at a turning point.
With a proposal to fully support the transportation losses of private bus companies starting next year, discussions are intensifying over whether to maintain the current financially supported private model or to expand public roles in routes, vehicles, and operations.
Ulsan City is reviewing plans to restructure the operational system, including the establishment of a public bus system and a transportation corporation.
As the burden on public finances increases, the key question is how far public authority and responsibility for bus operations will extend.
One of the reasons for discussing the establishment of a transportation corporation is the management structure of bus vehicles and routes.
While national and city funds are invested in introducing eco-friendly buses, the current system has private transportation companies owning and operating the vehicles.
Ulsan Mayor Kim Sang-wook raised concerns about the management structure of vehicles funded by public finances during a public transportation meeting in July, emphasizing the need for direct operation through a transportation corporation. Ulsan City is also considering establishing a transportation organization within the urban corporation and directly operating new routes.
The operation of routes is also a major focus of the current private model review.
New route establishment, vehicle increases, and scheduling adjustments require negotiations with transportation companies. This has led to concerns about delays in responding to new demand or adjusting routes in less profitable areas.
In July, students from seven high schools in the Buk-gu area submitted a policy proposal to Ulsan City, signed by over 3,500 students, demanding improvements in commuting inconveniences, student-centered route adjustments, and the introduction of a semi-public system.
Mayor Kim stated at the time, "If city buses are operated publicly, we can secure the flexibility to adjust routes according to citizen demands immediately."
Ulsan City believes that if the public directly participates in the operation of new vehicles and routes, it can enhance responsiveness to changes in citizen demand.
The establishment of a separate transportation corporation is not the only option being considered.
Ulsan City is first looking to create a transportation-related organization within the Ulsan Urban Corporation to discover and operate new routes, accumulating public operational experience before linking this to the future establishment of a transportation corporation.
The advantage of this approach is that it allows for the verification of transportation costs, necessary personnel, and service levels during actual operations while directly operating new vehicles and routes.
The transition committee for the ninth elected Ulsan mayor has also suggested that, in the short term, normalizing routes based on limited licenses should be prioritized, while in the long term, a phased transition to establish a transportation corporation should be encouraged.
However, the establishment of a transportation organization within the urban corporation and the separate transportation corporation is still under review.
Specific organizational forms, operational scopes, timelines, and how to divide responsibilities between existing private companies and public operations will need to be examined in the future design process.
The establishment of a transportation corporation or the introduction of a public system does not immediately lead to a reduction in financial burdens.
The semi-public system allows private companies to handle actual operations while local governments expand their management roles over routes, revenues, and standard transportation costs.
In contrast, a fully public system increases the public's responsibility across all operations, including vehicles, facilities, and personnel.
Depending on the operational model, the required finances, organizational structure, and roles of private businesses will inevitably differ.
The Korea Transport Institute has indicated that while a semi-public bus system can contribute to maintaining unprofitable routes, stabilizing management, and improving services, it also presents challenges such as increased financial support and potential declines in management efficiency.
It emphasizes the need for careful examination of standard transportation costs and the establishment of a management and oversight system for local governments regarding company accounting and personnel.
Ulsan is already providing financial support for most transportation losses.
Therefore, during the restructuring process, the key considerations will not only be the choice between public or private systems but also how to establish management authority and operational responsibilities that correspond to the scale of financial support.
The financial structure of existing bus companies is also a problem that needs to be addressed during the restructuring process.
As of the end of last year, the unpaid retirement benefits of six city bus companies in Ulsan amounted to 81.3 billion won.
Establishing a transportation corporation or transitioning to a public system does not automatically transfer these unpaid amounts or other debts of private companies to the public's burden.
However, if the public expands its role to include acquiring vehicles or depots from existing companies or directly operating routes previously run by private companies, the situation will change.
It will be necessary to determine the evaluation and acquisition scope of assets such as vehicles and depots, as well as how to succeed the employment of drivers and maintenance personnel.
The approach to gradually transferring existing routes to the public sector or directly operating new routes will also significantly affect the required costs and procedures.
Ultimately, establishing a public system or a transportation corporation is not just about changing the operating entity; it also involves examining the asset, employment, and debt relationships of existing private businesses.
The restructuring of Ulsan's city bus operational system will be evaluated not only on financial and operational structures but also on improvements in citizen services.
Currently, the bus ridership rate in Ulsan is around 10%. Even after a major route overhaul at the end of 2024, complaints regarding routes and schedules continue, prompting Ulsan City to pursue the restoration of discontinued routes, increases in service frequency, and adjustments to additional routes.
A transportation expert in Ulsan stated, "For the establishment of a public system or transportation corporation to translate into actual policy effects, improvements in accessibility, service intervals, and transfer convenience that citizens can feel must be achieved."
He added, "Along with the expanded public role, there should also be a concurrent strengthening of management and service evaluation systems for transportation costs, labor costs, and investments in vehicles and facilities."
In the future, the restructuring of Ulsan's city bus operational system will need to continuously assess how to adjust financial burdens and operational responsibilities, as well as whether institutional changes lead to improvements in routes and services that citizens can experience.
* This article has been translated by AI.
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