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THE INVESTOR
September 18, 2019
Big Reunion

Mobile & Internet

Kakao puts carpool beta service on hold indefinitely

  • PUBLISHED :January 15, 2019 - 19:07
  • UPDATED :January 15, 2019 - 19:16
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[THE INVESTOR] Kakao Mobility, a subsidiary of Korea’s top mobile messenger operator, on Jan. 15 announced that it is putting its carpool beta service on hold to first talk things over with the infuriated taxi operators.

“We are open to scrapping the service,” the Kakao affiliate said in a statement, adding that the decision was made to establish grounds for a dialogue. “We prioritize cooperation with the taxi industry and creating a social consensus.”

The move comes a month after the company delayed the official launch of the service following public rallies by cab drivers with one person committing suicide. They claim that Kakao Mobility’s carpool service would kill off the entire industry. 



At the time of the postponement, Kakao Mobility CEO Jung Joo-hwan had asserted that the firm would not consider abandoning its new service, saying that demanding it is equivalent to asking the firm to “shut out dialogue” altogether.

However, negotiations between the two parties continue to be stalled, and Kakao Mobility was forced to reconsider when on Jan. 9, another cab driver set himself on fire.

Resistance from related industries is not uncommon in most countries that have seen the launch of shared riding businesses. But the local cab industry has been particularly outspoken, with drivers engaging in self-injury. The government also appears to be lukewarm in allowing such services, causing industry leaders such as Uber to fail to enter Korea.

Following the announcement, Kakao shares lost ground, giving up the morning gains. The stock price fell 100 won (US$0.09) or 0.1 percent to close at 99,900 won today. The benchmark KOSPI rose 1.58 percent to 2,097.18 points.

Meanwhile, Kakao landed in the middle of another controversy for skipping a meeting organized by Cheong Wa Dae and the Korea Chamber of Commerce and Industry on the day. Naver representatives were also absent, triggering speculation about the cause. Officials at the two firms said it was simply the result of miscommunication.

By Park Ga-young (gypark@heraldcorp.com)

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