"The Secret to Kakao Taxi's Market Dominance Is Technology"

[Asia Economy Reporter Yuri Choi] Kakao Mobility's taxi-hailing app Kakao T continues to be a consistent choice among users. Despite intensified market competition following last year's taxi crisis, with latecomer companies launching cash promotions and recruiting drivers, Kakao T is evaluated as maintaining differentiation through technological prowess.

Industry experts cite the 'dispatch system' as the core competitive advantage of mobility services. Due to the immediacy required in transportation services, dispatch technology that efficiently matches drivers and users to enable quick meetings creates differences in service capabilities.

Since launching the service in 2015, Kakao Mobility has continuously invested in its dispatch system. Starting with a straight-line distance-based dispatch applied in the early stages, the system was advanced to road route-based dispatch and then to estimated arrival time-based dispatch.

In 2020, an artificial intelligence (AI) dispatch system was introduced. It analyzes over 30 variables through machine learning, including the day of the week and time of the call, taxi supply and demand status near the departure and arrival locations, and driving patterns, to predict drivers who can 'arrive quickly to the passenger and are highly likely to accept the call.' This approach is regarded as a fundamental solution that reduces drivers' selective acceptance and improves service quality.

The AI dispatch system shortened the average taxi dispatch waiting time. Kakao Mobility announced that the average dispatch waiting time decreased by 39%, from 14.1 seconds in 2019 to 8.6 seconds in 2021.

Accurate location information is also considered a competitive advantage. To complement the limitations of existing Global Positioning System (GPS) signals, Kakao Taxi has consistently invested in developing 'map matching technology.' This technology integrates GPS location, road network layout, and navigation information to identify all possible cases of the current locations of drivers and passengers and calculates probabilities for each case. The current location is then determined based on the case with the highest probability.

The technology to correct passengers' locations to positions more accessible for vehicles is also being advanced. It assesses whether the passenger's call location is in an apartment complex difficult for vehicle access or on roads with traffic restrictions and adjusts to an appropriate location accordingly. A separate coordinate database exclusively for taxi boarding has been established. When calling a Kakao Taxi from a large building, this map matching technology enables the app to automatically guide users to the optimal entrance where drivers and passengers can meet without the user having to manually set their location.

Additionally, Kakao Mobility pioneered various industry-first technologies, including the world's first LTE-based indoor positioning technology 'FIN' applied to commercial navigation in 2020, the development of 'one-time safe numbers' and 'safe message' features, a 'large-font driver app user interface (UI)' considering the average age of taxi drivers, and the application of 'app meter' for mid-sized taxis.