Kakao Taxi to offer luxury rides

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Kakao Taxi to offer luxury rides

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A cab driver uses the Kakao Taxi app. [JoongAng Ilbo]

Daum Kakao said Wednesday it will add a premium option to its taxi-hailing app, Kakao Taxi, that will compete against mobeom taxis, the deluxe black cabs currently in operation.

One hundred luxury taxis, all either BMW or Mercedes-Benz models, will begin a trial operation in Seoul in October.

The base fee has not yet been set but will be more than 5,000 won ($4.25), the minimum for existing mobeom taxis, according to a Daum Kakao spokeswoman.

“Given Korean consumers’ psychological barrier of 10,000 won, the base fee will be set between 5,000 won and 10,000 won,” she said.

The company also vowed to gradually diversify the brands and models of taxis, as well as expand the number of vehicles.

Daum Kakao forged a memorandum of understanding Wednesday with the Seoul Taxi Association, the taxi drivers’ union, and High End, a private enterprise managing premium taxis and their drivers. High End is a subsidiary of Korea Smart Card, the developer and seller of the ubiquitous public transportation card T-money, and is currently recruiting drivers who have a Seoul taxi driver’s license.

The candidates will have to go through foreign language and first aid training to be eligible to drive the high-end taxis.

“By proceeding with the premium taxi service in cooperation with the Seoul Taxi Association and High End, we hope that Kakao Taxi will take one step further as an efficient [transportation] platform for drivers, customers and business operators altogether,” said Chung Joo-hwan, head of the team managing Kakao Taxi at Daum Kakao. “High-end taxis will cater to the various needs of customers and become Kakao Taxi’s first profit model.”

Daum Kakao launched Kakao Taxi on March 31, and the number of users has risen dramatically over the past five months thanks to its affiliation with messenger app KakaoTalk, which has 38 million domestic users. It has thus far accepted an accumulated 12 million calls and the number of drivers using the app totals 140,000.

But Kakao hasn’t made a profit from the service, since it initially vowed not to charge drivers a commission to use the app.

Through the new high-end service, Kakao aims to earn profits from either a commission from connecting taxis or sharing a percentage of the entire ride cost with High End. The company has yet to decide from the two options.

The company said the luxury cars won’t have the three conventional features of an ordinary taxi: meter, payment device and cab light outside the vehicle. Payments will be made on the Kakao Taxi app, in which the customers will have entered their credit card information.

The feature is inevitably reminiscent of Uber, an app from a U.S. start-up that connects riders to drivers, though a spokeswoman from Uber Korea refused to comment on the matter.

Uber’s Korean operation started service in Seoul in August 2013, but traditional taxi drivers quickly protested on the grounds that it hurts their livelihood. The Korean government also began clamping down on the fee-paying transport service, citing regulatory problems, one of which was that the service was being provided by individuals without commercial driving licenses.

The Seoul Metropolitan Government announced in March it would give a 1 million-won reward to anyone who finds and reports private or rented car drivers offering transport through Uber X, the company’s cheapest service.

Uber Korea instantly scrapped Uber X, and now only operates Uber Black and Uber Taxi, which are legal.

Uber Black is a pricier service that hires drivers with professional chauffeur licenses. Uber Taxi offers Seoul’s taxi drivers use of the Uber platform free of charge - essentially the same model as Kakao Taxi.

The once fearless and outspoken American start-up has been keeping a low profile over the past five months and its spokeswoman said the company is now mulling a new measure for its growth here.

“Our principle here in Seoul is to abide by the law,” she said, adding the company is proud it has contributed to transforming the public transportation scene in Korea to some extent.

The spokeswoman also said that Uber won’t pull out of Korea just because its performance here has been sluggish.


BY SEO JI-EUN [seo.jieun@joongang.co.kr]

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