Kakao T charges 1,000 won for expedited service

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Kakao T charges 1,000 won for expedited service

Kakao has succumbed to government pressure to lower the price of a new service that allows customers to pay extra to secure a taxi quicker, offering the service for 1,000 won ($0.93), rather than the proposed 2,000 won to 5,000 won.

Kakao T started charging 1,000 won for what it has dubbed “Smart Call” at 1 p.m. Tuesday. To use the service customers must have a credit or debit card registered with the app, and the Smart Call fee will be charged to that card. The cost for the ride can be paid after the point of arrival as usual.

Customers may now choose between two options: General Call, which is free, and the new feature. Customers can use the Smart Call service for free on one journey before May 9 as part of a promotion.

When users ask for a taxi on the General Call option, Kakao Mobility, the transportation service arm of Kakao, is used to relay the call to the nearest taxi drivers. Smart Call uses a more advanced mechanism. Kakao’s self-developed artificial intelligence platform can analyze big data such as the distance to the destination, estimated travel time, drivers’ past routes and traffic situation and relay the request to the driver with the highest likelihood of responding to the call.

The KakaoTalk chat app operator said over 80 percent of current taxi drivers who use the Kakao T app have agreed to use the new feature.

Kakao, when originally unveiling the plan for the new charging system on March 13, said it was considering introducing two different paid call options that levy extra fees of between 2,000 won and 5,000 won. After complaints from various parties involved - government bodies and taxi driver associations - the scheduled launch of the service was delayed to Tuesday.

Kakao compromised after the Seoul Metropolitan Government and the Ministry of Land, Infrastructure and Transport sent guidelines on April 5 to the Seongnam, Gyeonggi-based tech firm asking it not to charge more than 1,000 won, equivalent to fees that traditional “call taxis” charge for hailing services.

“We have set the extra charge to minimize the impact after talking to the Land Ministry and the Seoul government,” said a Kakao spokesman.

To encourage more taxi drivers to use the app, Kakao will provide incentives in the form of points that can be converted into cash. Points are allocated based on how well a driver responds to calls and how good their customer reviews are.

Kakao has also devised a new system with Smart Call that hides users’ destination from the driver until they accept the job - a measure to prevent drivers from cherry-picking customers. If a driver rejects the call they will be barred from using Smart Call for a certain period of time.

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