'KRW 100 Billion Annual Sales' Kakao Mobility Receives 'Golden Ryan' Award

100% Year-on-Year Rapid Growth... Chairman Kim Beom-su of Kakao Encouraged

[Asia Economy Reporter Buaeri] Kim Beom-su, chairman of Kakao, recently visited the Kakao Mobility headquarters in Pangyo and presented a golden 'Golden Ryan' statue. Ryan is a male lion and a representative emoticon character symbolizing Kakao. Underneath the Golden Ryan gifted by Chairman Kim, the phrase 'Sales Surpass 100 Billion KRW' was prominently engraved. Chairman Kim has been presenting the 'Golden Ryan' to subsidiaries that achieve annual sales of 100 billion KRW. This is both an encouragement for their hard work and a symbol of the 'well-grown Kakao junior.'

◆ Sales Doubled in One Year = According to industry sources on the 12th, Kakao Mobility's sales exceeded 100 billion KRW last year. This figure combines Kakao Mobility's standalone sales of 97.3 billion KRW and the sales of subsidiaries such as Jinhwa Taxi, which was acquired last year. Considering that sales were around 53.6 billion KRW in 2018, the scale nearly doubled in just one year.

Kakao Mobility's sales growth is the result of the expansion of the franchise-type platform taxi business 'Kakao T Blue' and active entry into the business-to-business (B2B) sector. The franchise-type taxi business Kakao T Blue has rapidly expanded nationwide. Starting with a pilot operation of 100 Weigo Blue vehicles in March last year, a total of about 2,700 vehicles are now operating in Seoul, Seongnam, Daegu, Daejeon, and other cities. The business-use taxi service 'Kakao T for Business' has seen the number of corporate clients increase tenfold in two years. When the service launched in February 2018, there were 400 corporate clients, but now the number has reached 4,000. New business demands such as Kakao T Parking and Kakao T Bike also show steady growth.

There is more good news. The amendment to the Passenger Transport Service Act, a long-standing wish, passed the National Assembly plenary session on the 6th. With the passage of the amendment, a new framework centered on 'platform taxis' is expected to be established, and Kakao Mobility is evaluated to have solidified its position as an industry leader.

◆ Expecting Spillover Benefits from Tada's Suspension = Kakao Mobility has been preparing early to enter the platform taxi business in line with the Ministry of Land, Infrastructure and Transport's mediation plan. The number of Kakao T taxi driver members reaches 250,000, and users number 24 million. Last July, Kakao Mobility acquired a total of nine taxi corporations, including Jinhwa Taxi, securing 892 licenses. This is the highest level among domestic taxi companies. Kang Kyung-woo, a professor in the Department of Transportation and Logistics at Hanyang University, said, "Kakao has almost dominated taxis and now has a completely solo stage," adding, "With the disappearance of the competitor Tada, they can perfectly control the data."

There is also anticipation that the large van taxi 'Kakao Venti,' which was a competing model, will benefit from the suspension of Tada's Basic service. The industry expects that when Tada Basic ceases operations next month, it will absorb users who prefer vans. If Tada drivers facing job loss join Kakao Venti, the issue of securing drivers may also be resolved.

However, improving taxi driver service quality remains a challenge. It is difficult to directly manage taxi drivers outside the franchise system, and consumer expectations have risen due to Tada. Regarding this, a Kakao Mobility official stated, "There are market efforts to improve drivers' treatment, starting with a full management system," adding, "If drivers' treatment improves, we expect a virtuous cycle where service quality also improves."