[Reporter’s Notebook] The Bitter Reasons Behind Mobility Service Closures

[Asia Economy Reporter Buaeri] The mobility carpool service 'Poolus,' which once had up to one million users, has ultimately shut down its business. Following 'Tada,' which ceased operations last April, this marks the second time this year that a mobility venture has given up its business. It is also reported that other smaller ventures have effectively entered the process of closure. The 'mobility dark history' is fiercely unfolding.

What is noteworthy is the reason Poolus gave for abandoning its business. Poolus stated, "The carpool market was hit by the novel coronavirus infection (COVID-19)," but also did not omit the point that "carpool usage was restricted due to the social grand compromise in March 2019." This suggests that the 'social grand compromise' acted as another adverse factor alongside the major disaster of the COVID-19 pandemic. Since Tada also gave up its business for the same reason, the 'social grand compromise' is, at least for the mobility industry, an 'ill-fated relationship' that is neither social nor compromising.

The background of the social grand compromise was the strong opposition from the taxi industry when Poolus and others started carpool services. At that time, the 'Passenger Transport Service Act' only included a clause allowing carpool services during commuting hours but did not specify exact times. The mobility and taxi industries offered different interpretations and continued a power struggle. As the taxi industry's opposition persisted, the government launched the 'Taxi-Carpool Social Grand Compromise Committee.' However, only the government, the ruling party, the taxi industry, and Kakao Mobility participated in this committee, and carpool services were allowed only during four commuting hours (7-9 a.m. and 6-8 p.m.). The mobility industry's objection, "How can we grow by operating only four hours a day?" was buried under the label of 'social grand compromise.' In fact, the downfall of the mobility industry began at this point.

Kim Hyun-mi, Minister of Land, Infrastructure and Transport, emphasized at a meeting with mobility company representatives last March, "Please join forces so that a Korean-style innovation model, where innovation and coexistence can both thrive, can be established." While this sounds good, mobility ventures that should support the Korean-style innovation model are one by one giving up their dreams. Of course, there are times when the government must intervene. However, this time, the government should heed the harsh criticism from the venture industry that the mediation acted as a 'tilted playing field.'