[Exclusive] Big Companies Said They Would Stop 'Daeri Driving'... But the Call Industry Is Squeezing Even the Same SMEs

Daeri Unjeon General Association Excludes Voices of Small Call Dispatch Program Companies and Drivers
"To Prevent Large Corporations... Third Parties' Management Rights Seriously Violated"
Banapple, Operator of 'Logi', Sends Protest Letter to the Commission for Shared Growth

The photo is unrelated to the text. [Image source=Yonhap News]

[Asia Economy Reporter Cha Min-young] The forced recommendation related to the designation of ‘designated small and medium-sized enterprises (SMEs) for proxy driving’ prepared after a year of difficulties has faced criticism for representing only the interests of a specific call (phone) company. It is pointed out that the Korea Proxy Driving Federation, which took the steering wheel at the negotiation table, completely excluded the voices of small call dispatch program companies and proxy driving drivers, who are the weakest in the food chain.

According to the related industry on the 17th, a representative of Banapple, which operates the proxy driving call dispatch program ‘Logi,’ said, "The discussion on the designation of proxy driving as a suitable SME by the Win-Win Growth Committee (hereinafter referred to as the Committee) is proceeding in a direction that only benefits a specific organization called the Korea Proxy Driving Federation (hereinafter referred to as the Federation)." He added, "They are trying to restrict the entry of large corporations and even limit partnerships, investments, and sales with SMEs and startups, which poses a serious risk of managerial rights infringement." Banapple also sent an official letter to the Committee the day before with the title ‘Stop reaching an agreement on parts with risks of rights infringement’ in this regard.

The Committee formed a voluntary adjustment consultative body after the Federation applied for the designation of proxy driving as a suitable SME in May last year. In this process, a consultative body was formed that included only platform giants such as Kakao Mobility, T Map Mobility, and the Federation. Currently, the adjustment has failed, and the Committee is preparing to announce on the 25th whether to designate it as a suitable SME in the form of a ‘forced recommendation.’

The part Banapple raised concerns about is the ‘restraint on acquisition and expansion of wired call companies by large corporations’ specified in the working-level review proposal. It includes recommendations to refrain from investment partnerships through equity investment or management rights acquisition agreements in wired call companies, indirect mergers and acquisitions (M&A), and acquisition of management rights of program companies. A Banapple representative criticized, "While claiming to prevent market monopolization by large corporations, they actually intend to eliminate competition by infringing on the management rights of SMEs and startups."

The National Substitute Driving Labor Union held a press conference on the 12th in front of the Shared Growth Committee in Jung-gu, Seoul, stating, "We express deep concern and a stern warning regarding the hasty handling of issues that have been postponed due to the question of agreement among stakeholders such as Kakao Mobility, T Map Mobility, and the Korea Substitute Driving Federation." They urged the establishment of an effective consultation plan.

The Committee’s forced recommendation reportedly includes enforcing a market share of ‘45% for large corporations vs. 55% for SMEs’ and a complete ban on promotions by large corporations. Kakao holds about 25-30% market share by acquiring the second-largest proxy driving company ‘Callmaner’ in 2019 and the largest ‘1577 Proxy Driving’ last year. Adding T Map Mobility, which has about 1% market share, makes business expansion virtually impossible. A platform giant industry insider pointed out, "It is easy to estimate market share when using apps, but it is difficult to accurately calculate market share when using phone calls," adding, "Enforcing market share and banning promotions means telling them to do nothing and leave."

Proxy driving drivers are also very dissatisfied with the Federation’s unilateral actions. The National Proxy Driving Labor Union criticized, "Existing call companies take up to nearly 50% commission from proxy drivers while pretending to be the underdog asking to restrict market participation of platform giants," and said, "Win-win growth that excludes the rights of proxy driving drivers and citizen safety is deceptive."