Commuters wait for buses at a bus transfer center near Seoul Station, Jan. 31, 2023. Yonhap

Seoul's bus routes will be reorganized for the first time in 20 years to ensure that all residents are within a five-minute walk of public transportation, the Seoul Metropolitan Government said Tuesday.

The city government will also revamp the financial system from a postcalculation model — whereby the government compensated for the entire transportation deficit — to a new structure that provides financial support within a predetermined limit.

These overhauls come as the Seoul Metropolitan Government marks the 20th anniversary of its semipublic bus operation system.

"Seoul's city buses have offered low fares and high-quality services, but over the past 20 years, this has significantly increased the financial burden on the city government," Seoul Mayor Oh Se-hoon said during the press briefing.

"As various issues have emerged, including a route system that struggles to meet changing transportation demands, we are committed to enhancing the quality of bus services in Seoul once again."

Seoul's semipublic bus system was introduced in July 2004. It was designed to ensure public accessibility by maintaining bus routes in underserved areas, while the city government covers the deficit of bus companies.

However, the system has faced ongoing criticism for accumulating excessive financial burdens on the city government. Critics have also raised concerns that the involvement of private capital undermines public interest, and that bus routes are often operated in favor of service providers rather than passengers.

Seoul Mayor Oh Se-hoon outlines the city government's plan to reform the bus system and routes during a press briefing at Seoul City Hall, Tuesday. Yonhap

In response, the city will implement a comprehensive overhaul of its bus routes.

The current bus routes were evaluated as failing to adapt to shifting traffic demands over the past 20 years and not adequately addressing the needs of areas that are isolated or often overlooked.

Since January this year, the city government has been in discussion with Seoul's bus union to reorganize routes, aiming to streamline complex and overlapping services while improving access to areas underserved by public transportation.

In particular, the city plans to deploy double-decker buses on major routes with heavy congestion and minimal circuitous paths.

Autonomous buses will be introduced during early morning and late-night hours when driver shortages are common, as well as in isolated areas that are difficult for regular bus routes to reach.

Additionally, demand-responsive transportation will be utilized in regions with large older adult populations and near social welfare facilities.

The city also plans to revamp its financial support structure for bus companies.

Currently, Seoul operates under a postcalculation model, compensating for the entire transportation deficit of bus companies after deducting the total operating cost.

Under the new system, the city government will shift to a preconfirmation model, which determines the total income and expenses in advance and covers the difference only.

The city government expects that the revised system will encourage bus companies to focus more on increasing revenue and cutting costs.

It is estimated that this change could save up to 18 billion won ($13 million) annually by reducing administrative costs and loan interest. The new financial system is scheduled to take effect in January 2026, according to a city official.

"In line with the 20th anniversary of the semipublic bus system, we aim to achieve innovations in three key areas — finance, public accessibility and service," Oh said.

"Our goal is to provide citizens with a reliable transportation welfare system that enhances convenience and satisfaction in their daily lives, positioning Seoul's city buses among the best in the world."