Kakao's new paid taxi-hailing service hits brick wall
Kakao Mobility CEO John Chung speaks about the company's plan at a press conference at the Plaza Hotel Seoul last week. / Courtesy of Kakao Mobility
By Jung Min-ho, Kang Aa-young
Kakao Mobility's new taxi-hailing service, which allows users to get priority by paying a fee, faces challenges from the government and users.
After CEO John Chung told reporters last week that the company plans to launch the service at the end of this month, the government put a brake on its progress.
On Tuesday, Land, Infrastructure and Transport Minister Kim Hyun-mee said she will review whether the firm is allowed to operate the service within the law.
“It was their unilateral decision,” she said at a meeting in the National Assembly. “They have not talked to us about the issue.”
Under the law, taxi drivers cannot charge customers more than what the meter shows. Kakao's planned service, which allows customers to get a cab faster by paying 2,000-5,000 won ($1.90-$4.70), could be a violation of the law, according to experts such as lawyer-turned-lawmaker An Ho-young of the ruling Democratic Party of Korea.
The service offers two main paid functions. One is the “precedence call,” which ensures customer requests are sent to drivers who are more likely to accept them based on previous call-acceptance habits. The other more expensive option is to link customers instantly to any nearby taxi ahead of everyone else using the free Kakao Taxi application.
Few customers seem to be excited about the plan.
“Once the company launches the service, I will be out of its app,” a teacher, 29, told The Korea Times. “I do not want to pay more for the same taxis and same services.”
Another app user, 27, surnamed Cheong, said she is concerned that the service will make it even slower for people like her (who won't pay extra) to get a cab.
But not everyone is against the plan.
“It could be good for people who are in special need,” a college student, 25, surnamed Choi, said. “Still, I don't think I will use the new service. I would rather jump onto the street to catch an empty one.”
Taxi drivers are not warming to the idea, either. Major unions, including the Korea National Joint Conference of Taxi Association and the Korean Taxi Workers' Union, have issued a joint statement to express concern.
“The service will increase the financial burden on customers, which may affect the industry negatively,” they said.
One taxi driver said the service could intensify “cherry-picking” competition among drivers. “Drivers want long-distance customers,” he said. “So some drivers wait in hot spots until they find one through the app. The new service is expected to make more drivers 'wait and see.'”
Kakao's taxi-hailing service is No. 1 in Korea, with 18 million subscribers ― about 35 percent of the population. It has not charged fees since its launch in early 2015.