Macaron Taxi, Lee Haeng-yeol KST Mobility CEO
Various Models Possible Including Advertising Concepts If Government Regulations Are Lifted
[Asia Economy Reporter Buaeri] KST Mobility, which operates Makgeolli Taxi, has recently received a proposal for a '0-won taxi' from a major corporation and is discussing a concrete business model. The '0-won taxi' fills the inside and outside of the taxi with corporate advertisements, and the company pays the fare on behalf of the passengers. Companies can expect advertising effects, and passengers enjoy fare benefits.
◆ 0-won taxi with corporate advertisements... also operating in Japan = Lee Haeng-yeol, CEO of KST Mobility, which operates Makgeolli Taxi, said in an interview with Asia Economy on the 17th, "As the government moves toward resolving related regulations, various business models have become possible." The 0-won taxi is one of them. CEO Lee expressed expectations, saying, "If the advertisement screening passes and a prior report is submitted to the Ministry of Land, Infrastructure and Transport, it is likely to be approved."
CEO Lee believes that since the 0-won taxi is already being implemented in Japan, there is no significant difficulty in introducing it domestically. In fact, the Japanese IT company DeNA introduced the '0-yen taxi' in 2018, where advertisers pay the taxi fare. Based on the concept of Nissin Foods' 'Donbei Ramen,' the entire vehicle, including the taxi exterior, the roof sign, and the seats, was turned into a moving billboard. Makgeolli Taxi's 0-won taxi is also likely to operate in this form.
However, the 0-won taxi model is only possible with franchise taxis. Compared to regular taxis, which have restrictions on exterior appearance, franchise taxis have relatively more freedom in design. According to Article 93-2 of the Passenger Transport Act, transport franchise operators can apply for brand-specific plans such as vehicle color and marks.
◆ Differentiation through pet taxis, parcel taxis, etc. = Various business models like the 0-won taxi are being discussed because platform operators are entering the taxi market and competing in services. With the passage of the Passenger Transport Act amendment and the termination of Tada's Basic service, the current market has become a duopoly between Kakao's 'Kakao T Blue' and 'Makgeolli Taxi.' Franchise taxis introduce the concept of branding in taxis, similar to franchises like Paris Baguette or Kyochon Chicken. However, Tada is also showing signs of restructuring its business around taxis by recruiting drivers for its premium taxi call service 'Tada Premium' as of the 14th.
Kakao Mobility and Makgeolli Taxi are aggressively expanding their presence. Kakao Mobility currently operates 5,200 'Kakao T Blue' vehicles across 10 regions nationwide and plans to double this number within the year. Makgeolli Taxi currently has 7,600 vehicles under franchise contracts, with 3,600 in Seoul and 4,000 in other regions, and plans to increase the fleet to 20,000 within the year. The industry expects that if the taxi market, currently worth 8 trillion won, is reorganized into a franchise taxi model, it could grow to 12 trillion won.
As a latecomer, Makgeolli Taxi is seeking differentiation from Kakao through additional services such as advance reservations via an application and car seats. In mid-May, they plan to accelerate customer acquisition by offering a 1,000 won discount on the base fare. CEO Lee said, "Kakao seems to focus more on 'mobility services' like immediate dispatch and forced dispatch," adding, "Makgeolli Taxi does not see taxis just as taxis but as private cars, and plans to add additional services such as hospital accompaniment, pet taxis, and parcel taxis."
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