April 16, 2024

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After several months of bumpy negotiations, the taxi industry and Kakao Mobility finally broke their impasse and reached an agreement on March 7 to allow paid carpooling services.

According to the agreement signed by four local taxi associations, Kakao Mobility and the Land Ministry, paid carpooling services will be allowed during rush hour on weekdays in accordance with the Passenger Transport Service Act. Rush hour was interpreted to mean 7-9 a.m. and 6-8 p.m.

They also agreed on industrywide deregulation measures to grow the taxi industry, and decided to launch a taxi-based carpooling platform in the first half of the year.

The South Korean taxi industry had opposed allowing carpooling services at any time of day, saying the new business model threatened drivers’ livelihoods. 

“It is a meaningful decision because it reduces social strife and its scope allows broad deregulation that would allow various mobility services,” Kakao Mobility said in a statement following the agreement.

“We will try our best to create an innovative mobility ecosystem that benefits both users and workers,” it added.

Kakao’s pilot carpooling service was originally scheduled to launch in December. Since December, three taxi drivers have set themselves on fire in protest, resulting in two deaths.

In January, the company decided to postpone the official launch of the service indefinitely and negotiate with the taxi industry for a solution.

Conflicts between taxi drivers and carpool service providers appeared to be worsening in February when several representatives of a taxi association filed a lawsuit against smaller ride-hailing companies such as Tada and PoolUs.

Under the recent agreement, the taxi companies also agreed to take measures to improve the quality of their services, including the introduction of age restrictions for drivers.

To improve working conditions for taxi drivers, the taxi companies will soon pay monthly salaries. Currently, taxi drivers must turn a fixed amount over to their employers every day and take whatever is left.

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