[Newsmaker] Taxi drivers rise against Kakao’s new carpooling service

Tens of thousands of private and corporate taxi drivers took to the streets Thursday to protest Kakao Mobility, a new carpooling service to be launched by the end of the year.

At Gwanghwamun Square, central Seoul, some 70,000 taxi drivers gathered, according to the rally organizers, to fight what they called “illegal carpooling services” to be offered by the mobile messaging giant Kakao. 

“Let’s take down Kakao, which is stomping on the taxi industry,” chanted the protesters at the rally.

“In the name of the ‘sharing economy,’ the carpooling industry is taking away the livelihoods of 300,000 taxi drivers and their families,” they said in a statement.

Aside from threatening their jobs, the protesters say, the carpooling services also violate South Korea’s transportation laws and present significant safety issues.

The drivers announced that they would suspend operation of all taxis for 24 hours, beginning Thursday at 4 a.m. While this raised concerns across the nation, it did not seem to present a major inconvenience on Thursday.

Some 3,800 police officers were dispatched to the scene of the protest in case of emergency, according to the police.

Korea’s taxi industry is regulated by the Passenger Transport Service Act, which bans the use of private, unlicensed vehicles for commercial purposes, leaving little space for car-sharing platforms. The law was revised to allow exceptions during “commuting hours,” in which non-taxi drivers are permitted to engage in commercial driving activities.

Seo Sung-gil, a taxi driver who was working on Thursday morning, expressed discontent over the carpooling service.

“The company is playing a trick to fool the taxi drivers and the individual drivers opting to enter the carpooling industry,” Seo told The Korea Herald.

“The carpooling drivers will have to use (the more expensive) gasoline, instead of (natural) gas, and I do not think the insurance companies would like to cover private drivers who carry random passengers. The insurance fees would be so expensive.”

Seo also questioned whether the service posed a risk to passenger safety, as carpoolers will not undergo criminal background checks, unlike taxi drivers.

Kakao Mobility started to recruit private drivers Oct. 16 in preparation for the official launch of the ride-hailing service “Kakao T Carpool,” sparking a fierce backlash from local taxi drivers and operators, say it will take a toll on their business and steal their jobs.

The mobile giant has been planning to launch the new carpooling service connecting private drivers to riders since February, when the mobile messaging giant acquired Korean service app Luxi, which dominated the domestic car-sharing industry.

A group of four taxi unions, which organized Thursday’s protest, held rallies two weeks ago in front of Kakao Mobility’s headquarters in Pangyo, a neighborhood within Seongnam, Gyeonggi Province.

In their defense, Kakao Mobility argues the new service will be “a supplement to the taxi business,” and that it will resolve the shortage of available taxis during selected time frames -- namely, the morning and evening rush hours.

The public appears to welcome the new service. According to a local poll by Open Survey in June, 47.2 percent of 500 respondents agreed that carpooling apps should be permitted, while 15.2 percent disagreed.

Lee Woo-kyung, an office worker in Seoul, expressed discomfort over the many regulations against ride-hailing services.

“I sometimes had use Poolus (a local ride-hailing app) because it was cheap. Still, I think people who ride taxis will take taxis and those that do not mind using the carpooling service will use the service,” Lee said. “I think the government should leave it to the market to decide.”

At the same time, Lee said she could understand the complaints from the taxi industry, as she has seen many big corporations enter industries and quickly dominate the market.

By Jo He-rim (herim@heraldcorp.com)