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THE INVESTOR
March 24, 2019
Big Reunion

Startups & Investors

Criticism grows over Kakao Mobility’s agreement with cab operators

  • PUBLISHED :March 11, 2019 - 16:02
  • UPDATED :March 14, 2019 - 10:02
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The recent agreement signed between taxi industry representatives and Kakao Mobility to allow limited carpooling services is drawing concerns and criticism from other ride-sharing firms and industry watchers here.

"(This agreement) completely cuts any innovative attempts (by startups),” Lim Jung-wook, head of Startup Alliance, an internet giant Naver-backed nonprofit organization, wrote on his Facebook post. “Just because the taxi industry was outcrying, you let them do whatever they want. Continue to allow this and they will get rid of evrything that challenges their vested interests.”

According to the agreement signed by four local taxi associations, Kakao Mobility and the Transport Ministry, paid carpooling services will be allowed during 7 a.m. -9 a.m. and 6 p.m. -8 p.m. weekdays — a narrow interpretation of the rush hour. 

The Passenger Transport Service Act does not stipulate the exact time of the rush hour and ride-sharing companies have let users choose their own rush hour, citing diversified working conditions.


 

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



“The president said the regulations should be lifted in a way that services are allowed unless the law prohibits them, but this agreement prohibits or limits what is allowed by law,” Lee Jae-woong, founder and CEO of car-sharing service SoCar. “I’m afraid it will be a bad precedent.”

Both Lim and Lee said the limited operations will yield little business value and thus block emergence of any meaningful ride-sharing businesses.

In addition to hindering the growth of car-sharing industry, limited-time operations will fail to serve users’ demand, according to Seo Young-woo, CEO of ride-sharing service provider PoolUS. 

“The demand for carpool services is more during the night time than than 6 p.m.-8 p.m and demand during 9 a.m.-10 a.m. is as high from 7 a.m.-9 a.m,” Seo said.

Some also criticized that the negotiations were missing other important parties.

An official at a carpooling company said on the condition of anonymity that Kakao Mobility representing the entire car-sharing companies was problematic. “For smaller companies, this issue is critical, but Kakao Mobility just made an agreement with the taxi industry on behalf of everyone.”

“Where are customers in this -- the most important ones who taxis and public transportation everyday?” They should have been included as representative users,” Lim said.

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

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