Socar Business Revenue Grows 49%
24,000 Corporate Members
Kakao Members Increase 18-Fold in 3 Years
Corporate Cost Reduction and Tax Benefits
[Asia Economy Reporter Buaeri] GS Construction recently joined Socar as a corporate member. The 6,500 GS Construction employees can now use Socar’s car-sharing service during fieldwork or business trips. LG Electronics, KT, Shinsegae, and Lotte Department Store are corporate members of Kakao Mobility. Large corporations that used to operate their own corporate vehicles are increasingly switching to mobility companies’ ‘corporate exclusive services’.
According to Socar on the 12th, the number of corporate members has reached 24,000, which is about 3.4 times the 7,000 members in 2016. A Socar representative said, "Contracts with large clients in various industries such as construction and distribution are increasing." Despite the COVID-19 pandemic, Socar’s business revenue grew by 49% last year compared to the previous year.
Socar offers the ‘Socar Business’ service for corporate members. Corporate members can use Socar’s fleet of 12,000 vehicles nationwide as business cars during fieldwork or business trips. For companies, this reduces fixed vehicle operating costs, and settlement costs and driving records are automatically managed through the Socar app, making it convenient.
Kakao Mobility’s situation is similar. Kakao Mobility’s B2B (business-to-business) exclusive product, ‘Kakao T Business,’ has 7,500 corporate clients. While there were 400 contracted companies in 2018, the number has grown 18 times in three years. Kakao T Business provides corporate-exclusive services such as Biz Taxi, Biz Driver, and Biz Black. Biz Taxi is mainly used for employees’ commuting or fieldwork. Some companies provide Biz Taxi as a welfare benefit for late-night work. Biz Driver is mainly used for customer entertainment for sales purposes, and the premium model Black is used for protocol purposes.
Companies seek mobility services to reduce costs. This includes savings on driver salaries, parking fees, vehicle maintenance costs, and even tax benefits provided by the government. When companies use business taxis, they can receive up to a 20% reduction in the traffic inducement charge imposed on building owners under Article 36 of the Urban Traffic Promotion Act.
Socar Business receives tax benefits depending on local governments. In Seoul, if a company allocates some Socar vehicles in its company parking lot, it receives a ‘shared car usage’ traffic inducement charge reduction benefit. According to Socar, one steel company saved up to 2 billion KRW in vehicle operating costs.
From the perspective of mobility companies, regularly contracting with ‘big spenders’ like corporate members ensures stable revenue. For this reason, Socar and Kakao Mobility are fiercely competing in corporate-exclusive products. Socar launched a subscription product exclusively for corporate clients the day before yesterday. It is a membership that allows unlimited use for 99,000 KRW per month per employee. Kakao Mobility released ‘Kakao T Plus,’ a corporate-exclusive service that improves taxi availability.
Experts predict that the corporate mobility market will grow further. Professor Choi Kyung-jin of Gachon University said, "Cost reduction has become a major issue for companies after the COVID-19 situation," adding, "As demand from corporate members increases, the corporate market will expand even more."
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