Exclusive: Kakao Mobility Seeks Metropolitan Taxi Exemption

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Kakao Mobility's Application for Regulatory Sandbox Sparks Concerns

Kakao Mobility recently submitted an application to the Ministry of Land, Infrastructure and Transport for a mobility demonstration exception, aiming to remove regional restrictions on its premium taxi service, Venti. Currently, taxi operations are divided by region, but if the exception is granted, the Seoul, Gyeonggi, and Incheon areas would be integrated into a single metropolitan zone, allowing Venti to operate freely within that region. This move has raised concerns among small and medium-sized taxi-hailing companies, who fear that Kakao Mobility’s existing dominance in the market could be further solidified.

Integration of Premium Taxi Operational Areas

The Ministry of Land, Infrastructure and Transport announced in July that it would grant a demonstration exception to integrate business zones for premium taxis among taxi-hailing platform operators. The plan involves merging the current divisions of Seoul, Incheon, and Gyeonggi into a "metropolitan area," which would relax regulations and allow free operation within the region. A source from the taxi industry explained, "Previously, when returning to Seoul from Yongin, drivers could accept calls from Bundang on the way back to Seoul, but not calls heading to Incheon." With the new exception, drivers will be able to operate without restrictions from Yongin to Incheon, and from Incheon to Seoul.

This initiative aims to improve convenience for premium taxi users within the metropolitan area. In fact, VCN, which operates the Tada taxi-hailing platform, received approval for the demonstration exception in July and has been operating across the metropolitan area since September. As Tada expanded its operational areas, it launched a promotion offering all passengers three coupons for a 50% discount, up to 10,000 Korean won, on taxi calls originating from or heading to Gyeonggi and Incheon. According to the taxi industry, the lifting of operational restrictions for premium taxis has received positive feedback from passengers using Tada for family trips to the airport or business purposes.

Growing Tension Among Small and Medium-Sized Companies

Recently, as Kakao Mobility also applied for the demonstration exception, tension among small and medium-sized platform companies has increased. According to the taxi-hailing industry, Kakao Mobility is known to occupy around 95% of the domestic taxi-hailing market. Data from tech company IGAWorks’ Mobile Index shows that as of last October, the monthly active users (MAU) of KakaoT, the taxi-hailing platform, reached 14.39 million, ranking overwhelmingly first. A source from the platform industry said, "If a company that already dominates the market receives approval for the demonstration exception, it will not be a service experiment but an expansion of business."

In contrast, Kakao Mobility stated that the fundamental purpose of the Ministry of Land, Infrastructure and Transport’s demonstration exception is to preemptively assess how much consumer benefit can be achieved if regulations are improved. The company argued that its participation can aid in data collection. A Kakao Mobility representative said, "The regulatory sandbox aims to secure actual data to determine the necessity of regulatory improvements when new technologies and services conflict with existing systems, regardless of the size of the applying company." They added, "Accordingly, we applied for the demonstration exception for ‘Venti,’ our large premium taxi." The company claimed that since Kakao Mobility provides a large number of Venti taxis, user convenience could be further enhanced.

Industry Concerns Over Market Monopoly

Previously, in December of last year, when the railway union went on strike, the government temporarily lifted the operational restrictions in the metropolitan area, allowing all taxi operators, including Kakao Mobility, to operate freely. A mobility industry source said, "Currently, the domestic taxi-hailing market is virtually monopolized by Kakao Mobility, with only Tada and the foreign company Uber remaining, while most small and medium-sized companies have nearly ceased operations." They added, "Of course, anyone can apply for the demonstration exception, but it would be good if the government also considers that one company monopolizes the taxi market."

This situation highlights the growing concern among smaller players in the industry, who fear that Kakao Mobility's continued expansion could further limit competition and reduce opportunities for other companies. As the regulatory process unfolds, the balance between innovation and fair competition remains a critical issue for the taxi-hailing sector.

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