[Q&A] Lee Jae-myung Also Joins... Summary of the 'Kakao Call Favoritism' Controversy

[Asia Economy Reporter Bu Aeri] As Gyeonggi Province Governor Lee Jae-myung emphasizes the 'fairness' of platform companies, the controversy over the suspicion of 'Kakao call favoritism' seems to be prolonged. Following taxi organizations, Gyeonggi Province has also presented its own investigation results and raised concerns. Kakao Mobility is vehemently denying the allegations, saying "this is not true." The related controversies have been organized in a Q&A format for easy understanding.

Q. What is the suspicion of 'call favoritism'?

A. The taxi industry has long raised suspicions that Kakao Mobility concentrates calls only on its KakaoT Blue service. KakaoT Blue is a franchise taxi brand operated by Kakao. For example, when a passenger calls a taxi using the taxi-hailing application (app) 'KakaoT,' calls do not go to nearby taxis but instead go to KakaoT Blue taxis located farther away. The taxi industry points out that since 'KakaoT,' used by many citizens, already has a public good nature, it is problematic for one company to monopolize it unilaterally for profit enhancement.

Lee Jae-myung, Governor of Gyeonggi Province

Q. What is Gyeonggi Province's position?

A. Gyeonggi Province holds the position that the Fair Trade Commission should investigate the suspicion of 'Kakao call favoritism.' Kim Ji-ye, head of the Fair Economy Division of Gyeonggi Province, stated at the 'Online Platform Market Monopoly Prevention Measures Forum' held on the 24th of last month, "Some suspicions of dispatch favoritism were confirmed in the fact-finding investigation," adding, "Whether there is a violation of law requires investigation by the Fair Trade Commission."

Q. What is the basis for Gyeonggi Province raising the suspicion of 'call favoritism'?

A. Gyeonggi Province conducted a 'dispatch favoritism suspicion fact-finding investigation' targeting 115 individual taxi operators in seven cities where KakaoT Blue operates from the 10th to the 20th of last month. The results showed that the number of KakaoT dispatch calls decreased by 29.9% compared to before and after KakaoT Blue operation.

The decrease rates by region were: Guri 48.7%, Seongnam 35.0%, Yangju 29.8%, Namyangju 28.0%, Uijeongbu 24.4%, Hanam 24.0%, and Yongin 19.4%.

On the other hand, in regions where KakaoT Blue does not operate, the average number of KakaoT dispatch calls per region increased by 2.7% over four months from March to June, showing almost no change.

Additionally, in regions where KakaoT Blue operates, individual taxi sales decreased by about 13% on average compared to before and after KakaoT Blue operation, whereas in non-operating regions, sales increased by an average of 3.6%.

Q. What is Kakao Mobility's position?

A. On the 25th, Kakao Mobility stated in a press release, "It is not true that the number of calls decreased due to the introduction of KakaoT Blue." Kakao Mobility argues that the sample size of Gyeonggi Province's investigation is too small to be representative of the whole. The company also emphasized, "We do not engage in artificial dispatch that degrades the value of the platform."

Q. What is Kakao Mobility's basis for rebuttal?

A. Kakao Mobility rebutted, "We checked the 'received call count' sent from KakaoT to general individual taxi drivers, the same target as Gyeonggi Province's investigation, from February to August this year, and found that the number of calls in August increased by 42% on average per day compared to February."

The company added, "The increase ranged from a minimum of 12.9% to a maximum of 69.3% by region," and stated, "It is not true that the number of calls decreased by 30% due to the introduction of KakaoT Blue."

Furthermore, Kakao Mobility explains that since general taxi drivers selectively accept preferred calls on the KakaoT app, even if the platform sends many calls, the number of completed calls will inevitably appear low.

Kakao Mobility added, "Upon checking the call reception data of the seven regions investigated by Gyeonggi Province, from February to August this year, more than 100 calls per driver per day were sent on average, but the number of calls actually accepted and completed was low."

Q. Is 'call favoritism' possible?

A. Kakao Mobility drew a clear line, stating, "There is no artificial dispatch as AI analyzes the data."

A Kakao Mobility official explained, "Calls are not based simply on distance but on the taxi's 'estimated arrival time,' and big data on ▲driver evaluation ▲driver dispatch acceptance rate ▲driver driving patterns ▲real-time traffic conditions ▲recent driving distribution are simultaneously analyzed and applied so that the AI logic is built to enable 'fast and maximized matching between passengers and drivers.'"