Kakao starts Uber-style service, despite protests from cabbies
Taxi drivers around the nation hold a rally in front of the National Assembly in Seoul, Nov. 22, to protest against Kakao that is pushing ahead with its plan to launch the ride-sharing service. / Korea Times photo by Bae Woo-han
By Jun Ji-hye
Kakao is pushing ahead with launching its ride service despite continued protests from taxi unions, continuing with the trial service that started last Friday.
The IT firm said it will offer full-scale services to all users on Dec. 17 based on the results of the trial service.
Taxi unions, which have opposed the plan of the firm, are claiming they will hold a larger-scale rally by mobilizing all taxies around the nation, if the company presses ahead with rolling out the formal service.
Lawmakers, who have sided with taxi drivers, also claimed the ride-sharing service is in violation of the standing law, calling prosecutors to launch an investigation into the case.
Kakao Mobility said it has prepared to launch the service after acquiring the ride-sharing startup Luxi in February in an effort to offer alternative means of transportation to users who have had difficulties in using mass transportation during rush hour and late at night.
“We have given consistent efforts to have consultations with the existing industry for coexistence,” said an official from Kakao Mobility.
Kakao Mobility is a Kakao subsidiary formed in August to expand and monetize transportation services.
The company said it began offering the pilot service to a number of randomly selected users on the Kakao T app to raise technical safety and generate diverse opinions of the service.
The firm still offers its key transportation services including taxi-hailing and chauffeur services in the single application Kakao T.
The basic charge of the ride-sharing service is 3,000 won ($2.7) per 2 kilometers, which is 70 to 80 percent cheaper than that of taxies.
The standing law bans privately owned cars from being offered for paid services, but an exception clause states that they can be used for these during commute times.
Considering this, the firm said it set a limit that drivers can respond to calls twice a day.
Market observers said success or failure of the service would depend on user response.
The Kakao Mobility official said it was premature to talk about responses of users as the service was in the test stage.
“We could better understand responses of users after the official service is launched,” the official said.
Taxi drivers, who have been claiming the service will reduce the number of their passengers, are calling the company to cancel the service, warning that it will stop using the company's taxi-hailing service.
“The service is illegal,” unions said in a joint statement during the rally in front of the National Assembly, Nov. 22, claiming that the IT company interpreted the law arbitrarily.
The unions asked the Assembly to promptly pass bills designed to prevent IT companies from launching ride-sharing services.
Rep. Kim Kyung-jin of the Party for Democracy and Peace stood with taxi drivers, saying Kakao has recruited drivers for ride-sharing services through a poor verification process.
“Kakao does not have authority to check police records of drivers,” he said, Monday, saying Kakao's unlawful acts have driven the taxi industry into a corner.
He said prosecutors should begin an investigation into the case.