[New Wave] Another Digital Transformation: 'App Meter'

The smartphone can be said to be the greatest invention of the 21st century. Smartphones and application services have absorbed countless things that existed in the offline world into the online space.

In the field of mobility services, smartphones are also demonstrating their power. As more people use navigation, the nationwide road maps that used to be tucked behind the passenger seat have disappeared. With the emergence of Kakao Taxi, the culture of calling taxis through smartphone apps has been fully established.

A solution has also emerged to replace the mechanical meter placed in the middle space between the taxi driver’s seat and the passenger seat. The mechanical meter is a device that estimates travel distance by counting how many times the car’s wheels have rolled. It multiplies the wheel diameter by the constant pi (3.14), and then multiplies that by the number of rotations. The taxi fare has been calculated so far by adding the distance measured this way and the travel time.

Since the 24th of last month, Kakao Mobility has introduced an app meter for the first time among mid-sized taxis in its brand taxi 'Kakao T Blue'. Instead of the bulky mechanical meter occupying space, a smartphone application calculates my travel distance.

Those who use navigation regularly will easily understand the principle. My smartphone combines GPS satellite signals and map information to identify my real-time location and the route I have traveled. Even without using a mechanical meter, the app can sufficiently calculate how far I have traveled. In particular, the 'map matching' process, which improves accuracy by combining mobility big data collected by the platform with GPS, enhances the precision of route calculation. Kakao Mobility has already applied app meter technology to the premium taxi 'Kakao T Black'.

However, it was impossible to use it in mid-sized taxis, which are more versatile means of transportation. Despite technological maturity, what has blocked the expansion of app meters so far was none other than 'regulation'. Under the current Automobile Management Act, taxi meters are only defined as electrically operated mechanical meters, so app meters could not be used in general mid-sized taxis.

The regulatory sandbox, ambitiously promoted by the current government, solved this problem. Kakao Mobility received temporary approval for the use of 'GPS-based app meters' through the regulatory sandbox review by the Ministry of Science and ICT in September last year, and subsequently passed the Ministry of Land, Infrastructure and Transport’s 'Temporary Inspection Standards for App Meters' as the first case in July this year. Initially, the service will start with about 10 vehicles only for Kakao T Blue, but the number of applicable vehicles will be continuously expanded, and in the future, the service will be offered not only for brand taxis but also for general taxis.

The app meter automatically calculates toll road fees and out-of-hours surcharges. This can prevent potential disputes between drivers and passengers caused by incorrect input of various additional charges in advance. Also, when taxi fares increase, it is possible to simply upgrade the software and reflect it in the system. The current mechanical meters require removing the meter and installing a new program each time the fare system changes. The cost alone reached 4 billion won based on Seoul city standards. Taxi drivers were also hindered in their business as they had to wait in line at designated booths. The app meter also reduces these social costs for managing agencies.

The app meter enables various services that were not possible with the existing mechanical meters. It is possible to apply flexible fare systems or pre-determined fare systems based on the demand and supply of mobility. If services diversify, it will ultimately increase users’ choices and contribute to enhancing benefits. Another digital transformation is beginning in mobility services. I hope it becomes a new service that satisfies passengers, taxi drivers, and management agencies alike.

Jaeho Lee, Director of Digital Economy Research Institute, Kakao Mobility