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THE INVESTOR
March 21, 2019
Big Reunion

Startups & Investors

Customers turn cold shoulder to cabs in ride-sharing war

  • PUBLISHED :February 20, 2019 - 16:36
  • UPDATED :February 20, 2019 - 17:06
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It seems to be nothing short of war, complete with the casualties of those who have sacrificed themselves to prove a point. On Feb. 11, while taxi industry representatives were meeting with Kakao Mobility officials and lawmakers to talk it out, a 62-year-old cab driver set his taxi on fire drove toward the National Assembly.

This was after Kakao had said it was putting its ride-sharing services on hold. It was also just days before the Seoul Municipal government raised the basic taxi fare from 3,000 won (US$2.67) to 3,800 won.

“Allowing ride-sharing services into a market that is already saturated would not only destroy the taxi industry, but also other riding services,” said Park Kwon-soo, the head of the National Private Taxi Association.

He added that the nation’s cab drivers -- there are around 270,000 -- are at risk of being pushed into the lowest wage income bracket.

Suicides by those protesting ride-sharing are nothing new.

In New York, at least eight people have taken their own lives since December 2017 as taxi medallion prices have plunged amid new competition. In South Korea, three taxi drivers chose the extreme method of self-immolation, resulting in two deaths and one injury.

“It’s because (self-immolation) is the best way to get their message across,” said an official of the private tax association here who gave only his surname Kim. “We want people to know what we are going through, which includes shrinking income and the declining value of taxi licenses.”

Not getting it

Unfortunately, the drastic measures are doing little to earn the public’s empathy.

“I understand that the drivers might feel threatened, but that cannot be the reason to stop the emergence of a new industry,” said Lee Sun-min, an office worker in her late 20s.

“I’m personally not ready to use a ride-hailing service on account of safety concerns and because they aren’t really prevalent yet, but customers should be the ones who get to choose.” 


Taxi drivers stage a protest gainst Kakao Mobility's carpooling service in August, 2018. (Kim Seong-woo/Herald Biz)



Choi Sung-hee, a 36-year-old government worker who has experience with such services overseas and in Korea, agrees.

“I feel really sorry for those who died, but as a customer I want to use ride-sharing services as an alternative to taxis,” Choi said. “Unless cabs are able to offer a better experience, and if my options keep getting limited, I will be unhappy as a customer.”

The frustration also runs deep for Kakao Mobility, which was set to launch its carpool service in December but delayed the plan after a 57-year-old taxi driver burned himself to death. In January, it decided to put its service on hold indefinitely after another suicide by a cab driver. Kakao is talking with the taxi industry, but there has been little progress.

Recently, nine taxi drivers filed a lawsuit to stop the operation of mobility platform SoCar and its affiliate VCNC, which operates ride-hailing service Tada. The suits were filed against So-Car founder Lee Jae-woong and VCNC CEO Park Jae-uk. Lee was furious, and said he would take legal action. 


Act before it’s too late

Experts warn that the taxi industry will keep losing public confidence if it continues to resort to drastic measures. They also advise that engaging in dialogue could result in more productive solutions.

“The industry will face further isolation,” said Koo Jeong-woo, a sociology professor at Seoul-based Sungkyunkwan University.

One cab driver said on the condition of anonymity that he too wants to see the problem solved, and that he doesn’t want to be driven to suicide. He added that the more that he hears about ride-sharing services, the more he wants to join them -- Tada in particular, which has better working conditions.

“But I am afraid to speak up, because my colleagues are watching, and because the association won’t hear of it,” said the 53-year-old who recently received threatening messages for taking calls via the Kakao taxi app.

An official at a mobility startup here said realistic measures, such as setting up a fund to support retiring cab drivers or propping up the medallion value should be prioritized.

“Right now, we are just wasting our time on whether or not to approve the services, which is a necessary part of moving the economy forward and diversifying it.”

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

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