Taxi drivers stage a massive protest rally in front of the National Assembly in western Seoul on Nov. 22, 2018, against the planned launch of a carpool service by IT giant Kakao Corp. (Yonhap)
SEOUL, April 19 (Korea Bizwire) — Kakao Corp., once embroiled in a long-standing dispute with the taxi industry due to its ride-sharing service, is once again facing similar criticism.
Kakao Mobility Corp., the mobility business unit of Kakao, released a new 99,000 won (US$88.50) monthly subscription plan for taxi drivers last month that offers benefits on incoming calls, which the taxi industry has described as an arbitrary act by the company to make drivers pay for receiving calls firsthand.
The country’s top taxi-hailing company claims that the subscription plan doesn’t necessarily allocate more passengers to subscribers than those who do not subscribe.
However, offering ‘benefits’ of any kind for cab hailing, which is the primary source of income for all taxi drivers, naturally means concern for taxi drivers.
If taxi demand is constant, it is inevitable that non-subscribing taxi drivers will receive fewer calls than subscribing cab drivers.
For instance, the ‘favorite’ function included in Pro Membership allows cabs that have received satisfactory customer feedback and have been reserved as ‘favorite’ by customers to take priority when receiving upcoming calls.
Granted, the taxi-hailing service itself is also a paid platform. However, Kakao’s approach that makes the drivers feel as if they’re being forced to pay seems to be what’s exacerbating the problem at hand.
The taxi industry is already preparing for a head-on protest. The National Labor Union of Taxi Drivers and three other taxi unions have begun a series of one-person demonstrations.
Kakao introduced a ride-sharing service in 2019, but soon succumbed to heavy pressure from the taxi industry, including the deaths of a number of taxi drivers who attempted self immolation.
This time, however, Kakao Mobility has less room to retract its decision as it has received significant investments from Google, Carlyle Group, TPG, and other foreign investors, and is even planning an IPO.
For Kakao Mobility, delaying the business any further is becoming less of an option.
Moreover, the firm now has absolute dominance over the cab-hailing market, unlike two years ago.
H. M. Kang (hmkang@koreabizwire.com)
