Kakao to mull lowering fees for taxi drivers amid monopoly criticism

Kakao Mobility, the operator of Korea's popular taxi-hailing service Kakao T, said Monday it will consider lowering the membership fee for taxi drivers and companies amid criticism over alleged monopolistic practices.

The company said it will review lowering the membership fee to 3 percent or below from the current 5 percent to help ease the cost burden for its affiliated taxi drivers and taxi companies.

The announcement came after it held a closed-door meeting with the association representing Kakao T member drivers, as the platform giant and its parent firm Kakao Corp. have been under intense scrutiny over the running of its sprawling ride-hailing platform with what critics describe as unfair practices using its market dominance.

"Reflecting the needs of the taxi industry, we will actively consider lowering the fee for the new service that will be launched, to 3 percent or below, to minimize the burden for drivers," Kakao Mobility said.

The company said it plans to introduce the new membership scheme by the end of this year.

The announcement also came after Kakao officials said that its founder Kim Beom-su will spearhead the restructuring of Kakao T as part of efforts to overhaul the business.

Kim hosted an emergency management meeting with leaders of Kakao and its affiliates to discuss measures to revamp the taxi-hailing app, and seek ways to ease the company's apparent monopoly in the industry, according to officials familiar with the matter.

It is a follow-up to Kakao Mobility's recent announcement to lower the commission for taxi drivers and open up its ride-hailing platform to other taxi services as part of efforts to mitigate its dominance in the market.

The moves came after President Yoon Suk Yeol's criticism over the company's business practices related to potential misuse of its dominant position in the industry.

Adding to Kakao's challenges, the Financial Supervisory Service (FSS), the financial watchdog, has been looking into Kakao Mobility's dual-structure contract framework, which consists of a franchise deal and an affiliation deal, over allegations of accounting fraud.

The restructuring efforts will likely affect Kakao Mobility's future plans, including the anticipated initial public offering, for which the company has prepared since last year.

At the same time, its parent company Kakao has been under fire for alleged stock manipulation linked to its recent acquisition of K-pop agency SM Entertainment.

The FSS questioned Kim, the Kakao founder, last month and referred the company and key officials to prosecutors over the allegations.

In response to these challenges, Kim has assumed leadership of an internal management reform committee tasked with reviewing all aspects of the company's operations. He has committed to a comprehensive restructuring of the company.

"As Kakao's founder, I am painstakingly accepting criticism from many people," Kim told reporters Monday. "The company will return to where it started and put in all-out efforts to become a new Kakao, loved by people like it once was." (Yonhap)