Kakao Mobility Opens Franchise Platform... Recruiting Regional Operators

Commission 2.8% Franchise Product Operation Procedure Initiated

Kakao Mobility announced on the 5th that it will introduce a market participation-type franchise taxi model centered on the expertise of regional operators. This was introduced after reviewing the franchise taxi business structure to support the strengthening of the inherent competitiveness of the existing taxi market.

Kakao Mobility officially launched the Kakao T Blue franchise taxi service in 2020. To provide passengers with a standardized high-quality riding environment, it combined IT technology-based platform capabilities with a centrally managed franchise headquarters system such as KM Solution.

[Image source=Yonhap News]

As the franchise taxi service has been operating for five full years and entered a stabilization phase, Kakao Mobility has prepared a new franchise taxi business environment plan to support the strengthening of the inherent competitiveness of the existing taxi market.

First, to apply standardized service operation know-how, the franchise headquarters, which were operated under a centralized management system, will be decentralized by region. The plan is to allow operators with a high understanding of the local taxi market and experience and expertise in franchise business operations to participate in the franchise headquarters. Operators selected by region will manage offline service quality through franchise headquarters operations, and Kakao Mobility will open its platform to various franchise headquarters. Through this, it aims to focus on IT technology development and support to expand the business base with improved services.

The selection criteria for each franchise headquarters will be uniformly applied nationwide, including ▲co-prosperity capabilities with taxi operators, ▲expertise in franchise business operations, and ▲possession of service quality management systems. Detailed matters will be specified and disclosed later in compliance with the Act on Fair Transactions in Franchise Business and the Passenger Transport Service Act. The plan is to conduct transparent evaluations applying equal standards to all operators without being bound by any conflicts of interest.

Along with this, procedures related to accepting applications for operating a new franchise taxi product with a 2.8% commission have begun. Accordingly, individual taxi drivers or corporate transportation companies will be able to choose and operate either ▲a practical new franchise taxi with lowered commission and initial joining fees based on taxi industry opinions or ▲an existing Kakao T Blue franchise product of their choice. The matching algorithm will apply the same dispatch system to both Kakao T Blue and the new 2.8% commission product.

The new practical franchise taxi product will be piloted proactively through the existing franchise headquarters, KM Solution and DGT. Subsequently, an environment will be built where franchise headquarters operators with inherent competitiveness by region and various taxi services tailored to regional characteristics can emerge.