Tension Mounts in Taxi Industry... Will Kakao vs Taxi Conflict Ignite Again?

[Asia Economy Reporter Buaeri] As Kakao Mobility, which operates the taxi-hailing app 'KakaoT,' dominates the domestic mobility market, tensions are rising again within the taxi industry. With Kakao Mobility introducing paid services, the taxi industry has united once more to counter Kakao Mobility's monopoly. The industry is on high alert, fearing a recurrence of the 2018 'carpool conflict,' which even led to a taxi driver's self-immolation.

According to related industries on the 9th, the four taxi organizations (National Taxi Labor Union Federation, National Democratic Taxi Labor Union, National Private Taxi Transport Business Association Federation, and National Taxi Transport Business Association Federation) have formed a task force (TF) and announced plans to "carry out activities to respond to Kakao Mobility's monopolistic market dominance abuses targeting the National Assembly and government."

Lee Heon-young, head of policy and labor relations at the National Taxi Labor Union Federation, said, "When Kakao first introduced the intermediary app, they promised it would be free, but suddenly launching a paid service has caused great concern among corporate taxi drivers," adding, "We plan to respond meticulously through the TF."

Last month, Kakao Mobility launched a 'Pro Membership' exclusively for taxi drivers at a monthly fee of 99,000 KRW. By subscribing to this membership, taxi drivers can use features such as the destination booster, which allows them to quickly check calls to their desired destinations. The taxi industry interprets this as a step toward monetizing Kakao Mobility's taxi-hailing service.

The four taxi organizations also submitted a petition to the Ministry of Land, Infrastructure and Transport on the 7th. The petition urges the government to take measures against Kakao Mobility's market monopoly and to establish legal regulations addressing the unilateral monetization of taxi-hailing services.

The conflict between Kakao Mobility and the taxi industry has repeated annually since 2018. At that time, when Kakao launched its 'carpool service,' taxi drivers protested vehemently, leading to a tragic self-immolation incident. The taxi industry held large-scale rallies to protest, and Kakao Mobility eventually suspended the carpool service.

Subsequently, Kakao Mobility shifted its business direction toward coexistence with taxis. Having experienced conflicts with the taxi industry, Kakao Mobility began to dominate the market through its taxi-hailing intermediary app 'KakaoT.' Currently, the number of taxi driver members of Kakao Mobility reaches 230,000, with a market share of about 80%.

However, conflicts flared up again. Following the passage of the amendment to the Passenger Transport Service Act (known as the 'Tada Ban Law') in the National Assembly in March last year, the mobility industry reorganized around 'franchise taxis,' and Kakao Mobility's franchise taxi service 'KakaoT Blue' grew. The taxi industry raised suspicions last year that Kakao Mobility was funneling calls exclusively to its franchise taxis, and the Fair Trade Commission is currently investigating.

Regarding the taxi industry's opposition to the paid service, Kakao Mobility explained, "The Pro Membership does not guarantee dispatch or calls based solely on subscription status," adding, "As this is the first attempt, we will upgrade functions and add various options while collecting feedback from drivers."