 |
| A mobile phone user logs into Uber's app with an Uber Taxi in the background. Courtesy of Uber |
Uber, Google seek to capitalize on country's advanced IT infrastructure
By Kim Bo-eun
The Korean market has become a test bed for global firms' services due to the country's advanced IT infrastructure and tech-savvy consumers.
Uber and Google are the latest companies that have partnered with local mobility services providers to test services and collect data for new businesses.
The testing is being done based on Korea's high-speed internet infrastructure, superior smartphone penetration rate and the large population density in the Seoul metropolitan area, which have led to the rapid growth of mobile-based services for hailing cabs and other forms of transportation.
Korea is one of the top countries in terms of smartphone penetration, with over 93.6 percent of the population owning a smartphone as of 2019. Data shows that 28 million people ― more than half of the population ― are signed up with the cab hailing apps of local firms, such as Kakao Mobility.
The country's high degree of smartphone penetration is backed by the country's 5G network, which Korea first commercialized worldwide in April 2019.
Uber entered the local market in 2013, offering its conventional ride-sharing service, but pulled out after little success. This time, Uber has partnered with the mobility services unit of SK Telecom (SKT), T Map Mobility, to set up a new firm. T Map is SKT's version of Google Maps, the dominant navigation system used by over 50 percent of drivers here.
Uber's former director of Korea operations, Tom White, heads the joint venture, UT, which was launched April 1. Uber invested 114.7 billion won ($100 million) into the new entity, securing 51 percent of the company's shares; and separately invested $50 million into T Map Mobility.
"Uber's technology will be backed by T Map's base of 13 million users as well as 200,000 taxi drivers," a T Map Mobility official said. "Given Korea's advanced infrastructure as well as consumers who are comfortable using mobile-based apps and tend to be early adapters, global firms can use the market as a test bed for new services. It will be meaningful if the services prove to be successful here."
The official added that the data that is accumulated through operating a mobility business here could also be applied to other models.
In the longer term, UT is also seeking to launch a business in flying vehicles, according to business plans that have been submitted to the authorities ― Uber is set to work with T Map Mobility in developing services for urban air mobility vehicles. SKT CEO Park Jung-ho earlier stated his plans for the company to enable passengers to move between Seoul and areas in Gyeonggi Province within 30 minutes. T Map is likely to set up a data system for the new means of transport.
 |
| A futuristic image of a self-driving vehicle / gettyimagesbank |
On the same day of UT's launch, Kakao Mobility announced that it received a strategic investment worth 56.5 billion won from Google. Through the investment, Google acquired a 1.7 percent stake in Kakao's mobility unit.
The two entities are expected to work together on developing artificial intelligence (AI) technology, cloud computing and the internet of things. AI is currently used in matching taxis with customers, based on routes. The technology is also used in other services such as estimating when a parking lot will fill up.
Kakao declined to comment on any specific plans, given the early stage of the partnership. But given Google's business in autonomous driving technology, expectations are that the two may work together in developing a self-driving taxi business. Google has Waymo, an autonomous driving technology company, under its wing.
Kakao Mobility launched the country's first autonomous-driving service last December, in partnership with self-driving systems provider Autonomous a2z. Kakao has stated plans to launch its own self-driving vehicle in the first half of the year. Currently, the self-driving service is available for a 23-kilometer route in the administrative city of Sejong, used by government workers commuting to work.
"The large pools of data that Kakao Mobility holds, and its utilization of artificial intelligence, such as in self-driving vehicles, as well as its cab hailing services, likely appeared as attractive elements for Google to partner with the company," an industry official said.
Kakao Mobility also attracted 220 billion won in investments from the Carlyle Group in February.
"While further technological developments for self-driving vehicles will be needed in order to determine specific needs in terms of infrastructure, the general view is that an advanced telecommunications infrastructure is needed for the vehicles to operate," Shin Hee-cheol, who heads the Korea Transport Institute's Fourth Industrial Revolution & Transport Department, said.
"To find the precise location of the vehicles, the Internet infrastructure needs to offer a fast speed with a minimal lag time. The 4G network here showed inferior accuracy in locating a vehicle, which is why 5G ― or even 6G ― is considered the necessary network."
