What Do You Think About the 'Tip' Service Introduced in Taxis?

KakaoT Introduces 'Thank You Tip' for Affiliated Taxis
"Concerns Over Cost Burden Shift" Grow Loud
Entry Barrier Raised by Requirement to Give Perfect Rating
Positive Opinions Also Heard on Site

Taxis are waiting for passengers at the Seoul Station taxi stand on the 31st, ahead of the 1,000 won increase in the basic fare for medium-sized taxis in Seoul from the current 3,800 won to 4,800 won starting at 4 a.m. tomorrow. Photo by Kang Jin-hyung aymsdream@

The mobility platform ‘Kakao T’ has introduced a tip service that has received mixed reactions. While concerns are spreading online that a tipping culture, like in the United States, could become entrenched and lead to increased fare burdens, the response on the ground has been positive.

Concerns Raised Over ‘Gratitude Tip’ Cost Burden Shift

Kakao Mobility launched a pilot ‘Gratitude Tip’ service on Kakao T starting from the 19th. Customers satisfied with their ride can voluntarily add a tip to the fare. The service applies only to Kakao Black, Modeum, Taxi, Venti, Blue, and Pet services, excluding general calls. When giving a 5-star rating to the driver, customers can choose from three options (1,000 won, 1,500 won, 2,000 won) to add a tip payment.

The Gratitude Tip service was created at the request of taxi drivers. Since last year, at the win-win discussion table between Kakao Mobility and the affiliated taxi council, drivers expressed the opinion that "it would be good to have a system where tips can be given selectively as motivation for service improvement," which was reflected in the service. Similar services have been implemented earlier by i.M and Tada.

On social networking services (SNS) and other online platforms, negative reactions have continued. With taxi fares having increased this year, there are claims that adding tips would make it difficult to bear the cost. Some expressed concerns that taxi drivers might force tips, leading to disputes. There were also significant worries that tipping culture could become established across various services, starting with taxis.

However, the actual service experience differed from these concerns. Voices from the field showed more positive than negative reactions.

A pilot service of the gratitude tip added to the KakaoT app. (Photo by KakaoT app capture)

Low Awareness and High Entry Barriers for ‘Tips’... Positive On-Site Reactions

The Gratitude Tip service was not easily accessible in everyday life. Attempts to call the affiliated taxi ‘Kakao T Blue’ repeatedly failed due to a lack of nearby taxis. After several failed calls in regions with fewer affiliated taxis, such as rural areas and the outskirts of Gyeonggi Province, calls were only successful after moving to central Seoul.

The requirement to give a perfect 5-star rating to leave a Gratitude Tip also raised the entry barrier. Star ratings are often skipped. The screen for star rating did not provide any information about the Gratitude Tip. The taxi drivers used also did not mention the Gratitude Tip separately.

Drivers’ reactions were generally positive. Rather than the tip helping their income, many responded that receiving positive evaluations from passengers was more gratifying.

Bang Mo, a Kakao T Blue driver, said, “Since the service was introduced, I have received tips 3 to 4 times, but after card fees, it’s less than 10,000 won, so it doesn’t significantly help my income,” adding, “However, thinking that someone gave me a perfect star rating made me proud and motivated me to drive more kindly.”

For affiliated taxi drivers, star ratings are an important factor. Kakao Mobility assigns rides to drivers based on about 30 dispatch criteria, with star ratings being one of the key factors. If a driver’s rating is relatively low compared to nearby taxis, it could affect their dispatch opportunities.

Lee Mo, a non-affiliated corporate taxi driver, said, “Affiliated taxis are unpopular because they have to undergo various regular trainings, but if tips help earnings, it’s worth considering. However, given domestic sentiment, receiving tips may not be easy.”

A Kakao Mobility official said, “The Gratitude Tip service is understood to be used voluntarily by some users, and there are also cases where customers leave thank-you messages for drivers,” adding, “We believe it can play a virtuous cycle role in enhancing customer experience and service satisfaction.”