SEOUL, April 7 (Korea Bizwire) — Kakao Mobility Corp., South Korea’s leading taxi-hailing firm, said Thursday that it will invest 50 billion won (US$41 million) to support its business partners to spearhead shared growth.
The investment is part of a 300 billion-won fund created by its parent firm, internet giant Kakao Corp., to support small business partners over the next five years.
“Kakao Mobility aims to support the mobility ecosystem so that it can accomplish shared growth through the coexistence fund,” Ryu Geung-seon, CEO of Kakao Mobility, said during an online press conference.
The fund comes amid growing scrutiny over the online platform giant’s rapid expansion through its dominant messaging service KakaoTalk, which boasts around 46.6 million local users, accounting for around 90 percent of South Korea’s population.
On the back of its strong online user base amid the pandemic, Kakao has aggressively entered new businesses, heralding a shift to online services in South Korea and becoming one of the country’s top five most valuable companies before its recent tumble.
Kakao’s mobility unit faces allegations that the company deliberately gives priority to taxis affiliated with the firm in receiving calls when a customer hails a taxi with its application.
The company has also faced fierce protests from taxi drivers for attempting to levy some fees for its taxi-hailing service, which taxi drivers argue had previously been offered for free.
Of the proposed budget, 37 billion won will be earmarked to enhance profitability of the platform’s service providers, including taxi drivers, Kakao Mobility said.
As part of Kakao’s long-term strategy named Beyond Korea, Kakao Mobility said it will make inroads into the global market by expanding service in 120 countries.