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Kakao Mobility subsidiary fined $2.81M over unfair practices

Published: 28 May. 2025, 16:52 Updated: 28 May. 2025, 18:40

Pictured is a Kakao Blue taxi operated by Kakao Mobility at Seoul Station, central Seoul, in February 2023. [YONHAP]

Korea's antitrust watchdog said Wednesday it has imposed a fine of 3.88 billion won ($2.81 million) on a subsidiary of Kakao Mobility, operator of the nation's leading taxi-hailing service, for engaging in unfair business practices.

KM Solutions, a wholly owned subsidiary of Kakao Mobility, was found to have entered into unfair contracts with franchise taxi drivers by excessively charging platform usage fees, the Fair Trade Commission (FTC) said.

Since December 2019, KM Solutions has applied a bundled fee structure, collecting a fixed 20 percent commission from total fares, according to the FTC. The fees covered charges for ride-hailing platform use, royalties, marketing and vehicle management software.

The regulator pointed out that the company imposed fees even on fares earned from passengers hailed on the street or through rival taxi-hailing apps, regardless of how the passengers were picked up.

Kakao Mobility denied any wrongdoing, arguing its franchise taxis had access to a "total package" of services, including full use of the company's infrastructure, regardless of whether passengers were hailed through its platform.

The tech giant said it plans to contest the decision through administrative measures.

In January, the FTC issued a correction order and imposed a fine of 228 million won on DGT Mobility, the Kakao Mobility-affiliated franchise operator based in the central city of Daegu and North Gyeongsang, for similar practices.

Yonhap