If Tada Next and I’m Taxi Merge, Kakao T Venti Fleet Surpasses Them
Attention on Whether Kakao Mobility’s Dominance Will Shake the Large Taxi Market
[Asia Economy Reporter Yuri Choi] Kakao Mobility and Tada and I’m Taxi, which have been competing in the large taxi market, are planning a merger. If the two companies merge, they will secure more operating vehicles than ‘KakaoT Venti,’ the number one in the large taxi industry. This means that the Kakao Mobility monopoly system can be shaken through economies of scale.
On the 1st, VCNC, which operates Tada, and Jin Mobility, which operates I’m Taxi, announced that they are reviewing a merger. To this end, the two companies are conducting corporate due diligence. It is still in the early stages of discussion, and the merger method or timing has not been decided.
I’m Taxi is a taxi-hailing service that operates only large taxis such as the Carnival. It was launched in December 2020 as a joint venture of nine taxi corporations and added three more corporations last year. Currently, about 1,000 vehicles are in operation. Tada provides large taxi services through ‘Tada Next.’ It officially started service in April last year, and the number of operating vehicles exceeds 500.
The reason the two companies are pushing for a merger is to grow in size and compete with Kakao Mobility. Kakao Mobility leads the taxi-hailing market with the ‘KakaoT’ platform, which occupies more than 90% of the market, and also holds an advantage in large taxis. KakaoT Venti has the largest number of operating vehicles at 1,200. The gap is relatively smaller than with mid-sized taxis, so it is considered worth competing.
Representatives from Tada and Jin Mobility explained, "In a situation where the asymmetry of the domestic taxi-hailing market is severe, this is to quickly promote innovation by increasing the scale of large and premium taxis."
Since last year’s taxi crisis, demand for large taxis has been increasing. As it became difficult to catch taxis, users emerged who were willing to take large taxis, which are up to four times more expensive than mid-sized taxis. The average daily number of users of KakaoT Venti in July last year increased by 84.7% compared to the same period the previous year. Tada Next’s completed drop-off cases in August last year increased by more than 46% compared to the end of 2021, right after the beta test. Completed drop-off cases refer to instances where a taxi was called and the passenger successfully boarded. This has led to continued demand for large taxis.
Although the large taxi market is growing, increasing the number of operating vehicles is not easy. This is because there is a shortage of drivers and delays in vehicle supply. Large taxi drivers prefer KakaoT Venti, which has many users and is good for increasing sales. I’m Taxi and Tada Next set their target operating vehicles at 1,500 each last year but failed to achieve this. Accordingly, the two companies have competed to secure drivers by offering various incentives such as lowering platform fees and interest-free loans for vehicle purchases.
The industry, including Kakao Mobility, is paying attention to the merger moves of the two companies. Increasing the number of operating vehicles can make taxis easier to catch, which may increase users and driver inflow. A mobility industry official said, "In the past, Tada confirmed that there is a certain level of demand even when operating only large services," adding, "If they capture users who leave because taxis are hard to catch and secure new users, there could be a chance of success."
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