Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
KakaoT, UT, Tada to battle for cab-hailing services market
Vehicles using the cab-hailing platform KakaoT are parked in a parking lot for a taxi management company in Seoul. Yonhap
By Kim Bo-eun
By Kim Bo-eun
The market for cab-hailing services is set to heat up during the rest of the year, as the current social distancing measures are likely to be eased and platform firms are stepping up their game.
The government plans to remove some social distancing restrictions in November, as the percentage of vaccinated people nears 70 percent. The limit on business operating hours for restaurants and bars is expected to be lifted, which will may enable a flurry of year-end gatherings and result in a surge in demand for taxis.
The cab-hailing market has so far been dominated by KakaoT, with 10 million monthly active users, but the company is facing growing competition from smaller players. UT, a joint venture with SK Telecom's T Map Mobility, follows Kakao with 980,000 monthly active users. Tada is the smallest player in the market, with about 110,000 monthly active users.
Kakao's market share is far greater compared to the other two players, but it faces competition from UT, as the latter offers a cheaper platform commission rate of 2.5 percent.
UT is preparing to increase the number of taxis operating on its platform to 10,000 by the end of this year, up significantly from 1,200 vehicles in operation during the first half of this year.
A key barrier for smaller players in the cab-hailing service market is the tendency for customers to keep using the first application they downloaded, and Kakao's early presence in the market has enabled it to benefit from this tendency. Competing firms are seeking to capture Kakao's users by offering discounts amounting to 30 percent.
Tada had been struggling after the National Assembly passed a regulation in April last year that curbed its services. But the platform is set to step up its game, now that it has been acquired by the fintech services app Toss. Toss, with 20 million users, is seeking to create synergy with the latest acquisition. Tada differs from its rivals in that it offers larger vehicles that carry up to eight passengers.
In the meantime, the growing negative sentiment toward Kakao Group's dominance as a tech-based platform in Korea has created additional uncertainties for KakaoT.
The government and lawmakers are increasingly seeking to regulate the growth of the platform, as KakaoT has been taking away business opportunities from smaller businesses.
KakaoT decided earlier to lower its membership fee for taxi drivers from 99,000 won a month to 39,000 won after controversy brewed over the hefty cost.