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Vehicles using the cab-hailing platform, KakaoT, are parked in a parking lot in Seoul in this Sept. 14, 2021 photo. Yonhap

By Baek Byung-yeul

Kakao Mobility has been targeted by leading presidential candidates ahead of the March 9 presidential election.

The two leading presidential candidates ― Lee Jae-myung of the ruling Democratic Party of Korea (DPK) and Yoon Suk-yeol of the main opposition People Power Party (PPP) ― have both said that Kakao Mobility, which operates a taxi-hailing platform, receives too much money from consumers and taxi drivers. They both added that if they become president, the new government will come up with measures such as launching a government-led taxi-calling platform.

Kakao Mobility is the country's largest ride-hailing service with a market share of around 80 percent. By logging on to the company's Kakao T mobile app, consumers can use taxi-hailing and chauffeur service and rent bicycles, as well as making reservation for train tickets and even airplane tickets conveniently.

Its mobile app has been popular due to the great advantages of being linked to KakaoTalk, the country's No.1 mobile messenger run by its parent company Kakao, enabling convenient access and payment for various services.

On Feb. 16, however, Lee met with taxi drivers belonging to a union in Seoul's Gangnam area and emphasized the need for launching the government-led taxi-hailing service.

Lee said Kakao Mobility is receiving excessive fees from taxi drivers, saying that "1 percent of taxi call fees is enough." Kakao Mobility charges franchise taxi companies and private taxi drivers 20 percent of their total sales, 16.7 percentage points of which is refunded in the name of brand promotion or other reasons, which means the company collects a commission fee of around 3.3 percent.

Almost all taxi business operators and private taxi drivers are using Kakao Mobility's service due to its dominance. According to data by the transport ministry and Kakao Mobility, 226,154 out of 243,709 taxi drivers nationwide were subscribed to Kakao Mobility's mobile app as of the first half of 2021.

Yoon also made a similar pledge. During a meeting with the taxi industry in Seoul, Feb. 8, he said "I know there are a lot of issues caused by the monopoly of the Kakao platform. It is very unreasonable and goes against the common sense of the public to receive a huge portion of the profits in fees. If the government creates a platform through government financing, it will work well."

Though the two leading candidates are vying to fix the Kakao Mobility issue in the next government, it remains to be seen whether a government-led taxi-hailing app would succeed.

City governments such as Busan, Incheon and Suwon have already launched their own apps, but only a handful of people are using these services. The Seoul Metropolitan Government launched its own taxi apps twice in 2017 and 2019, but gave up on them both times due to consumer indifference and failure to secure a sufficient number of taxi drivers.

"It remains to be seen whether the government-launched app will be able to continue fulfilling jobs necessary for long-term service operation, such as identifying and managing users' needs," a spokesman from a local IT company said.