Kakao acquires taxi firm to develop new mobility services
Minister of Land, Infrastructure and Transport Kim Hyun-mee, fourth from left, and Kakao Mobility CEO Jung Joo-hwan, third from left, hold hands with representatives from the taxi industry during a ceremony to launch a panel to seek mutual growth between conventional taxi service providers and ride-hailing platform operators at the National Assembly on Jan. 22. / Korea Times photo by Oh Dae-geun
By Jun Ji-hye
Kakao Mobility has acquired a taxi company following the Ministry of Land, Infrastructure and Transport's announcement of new regulations designed to settle the conflict between conventional taxi service providers and ride-hailing platform operators, the company said Friday.
Kakao Mobility, a Kakao subsidiary set up last year to expand and monetize transportation services, recently signed a contract to acquire a taxi company based in the Gangnam district of Seoul. The taxi company reportedly has 200 employees and 90 taxi-driving licenses.
Kakao T app operated by Kakao Mobility
Kakao Mobility said it will soon wrap up the process after carrying out an inspection of the firm to confirm that there are no grounds for disqualification, such as hidden debt.
The move to take over the taxi company comes after the ministry announced a compromise for mutual growth between ride-hailing platform operators and established taxi companies, July 17, requiring ride-hailing platform services to purchase taxi driving licenses to develop and offer their services.
“We have received various proposals from taxi companies,” a Kakao Mobility official said. “We signed this contract in a bid to conduct a test trial to see the effects of integrating IT and platform technologies with taxies.”
The official said the company expects the data yielded through the test to present good business opportunities for other taxi companies.
The takeover price is unknown, but industry officials said Kakao Mobility is expected to pay about 70 million won ($59,000) per license. Usually, a taxi-driving license is traded for about 60 million won here.
Kakao Mobility is the first among ride-hailing platforms here to take over a taxi company since the ministry announced the measures.
Industry officials said the company is expected to continue to acquire other taxi companies to obtain licenses needed to operate at least 200 to 300 vehicles.
Other mobility platform operators are also expected to try and obtain licenses.
The ministry announced its long-awaited compromise plan amid intensifying conflict between conventional taxi service providers and ride-hailing platform operators, with the former claiming the latter was “stealing” passengers and undermining their business.
Four cabbies have set themselves on fire in protest ― only one survived.
“Our measures are aimed at settling the conflict between taxis and new platform companies, seeking mutual growth, while providing better services to the public,” Vice Transport Minister Kim Kyung-wook said in a press briefing.