South Korea’s antitrust watchdog has fined Kakao Mobility, the ride-hailing unit of Korean tech agency Kakao, $10.5 million (KRW 15.1 billion) for limiting rivals’ entry to its taxi app — decreasing the penalty from an preliminary superb of $50.3 million (KRW 72.4 billion) as the sooner sanction was primarily based on an overestimated calculation of the corporate’s working earnings.
Individually, in November, the Monetary Providers Fee fined the taxi-hailing agency $2.47 million (KRW 3.4 billion) for suspected accounting fraud, referring the case to the prosecutor for additional investigation.
Kakao Mobility gives common ride-hailing providers by way of its Kakao T app and franchise-hailing providers below its subsidiary model, “Kakao T Blue”, additionally throughout the similar app.
Franchise taxis, together with Uber and native peer TADA, can use Kakao’s platform since common taxi hailing is a brokerage service that intermediaries present to all drivers on the platform below South Korea’s Passenger Transport Service Act. Whereas franchise taxis work with platform-based transportation suppliers similar to Uber to offer specialised hailing providers as an alternative choice to common hailing — such a differentiating on automotive high quality, say, or pick-up time.
Kakao Mobility holds the biggest market share within the nation’s taxi-hailing market, capturing a 96% market share as of 2022, in line with a press release by the Korea Truthful Commerce Fee (KTFC) in October. As of October, Kakao Mobility, also called Kakao Taxi, remained the market chief — with 13.2 million month-to-month energetic customers — whereas rivals Uber, TADA, and I’M had 700,000; 6,400; and 5,800 MAUs, respectively, per an area media report.
Final month, the KTFC said that Kakao Mobility had demanded franchise rivals, similar to Banban, Macaron Taxi, TADA, and Uber Taxi (previously often called UT), both pay a charge for his or her drivers’ entry to the Kakao T app or signal partnership agreements permitting Kakao Mobility to gather their operational knowledge, together with delicate enterprise info similar to driver particulars. In the event that they refused, franchise drivers who use Kakao’s platform can be blocked from utilizing the Kakao T app.
Uber and TADA didn’t have partnerships with Kakao Mobility, inflicting their taxi drivers to dam the usage of its Kakao T app. As a substitute, Banban and Macaron Taxi partnered with Kakao Mobility, in line with the KFTC’s October assertion. The partnerships helped Kakao Mobility develop its marketshare from 51% in 2020 to 79% in 2022, cementing its market dominance.
“Blocking [franchise taxis from accessing calls on the Kakao T app] is definitely completed to reduce name duplication between platforms and improve consumer comfort,” claimed J Choi, a spokesperson at Kakao Mobility, in an emailed assertion.
“Kakao Mobility is absolutely dedicated to supporting the federal government’s initiatives to advertise honest competitors throughout the platform trade whereas concurrently pursuing administrative litigation to unequivocally reveal that no authorized violations occurred,” the assertion added.
Kakao reported an improved working revenue for the third quarter of this yr in November, however issues stay as the development got here with out gross sales progress. Moreover, the corporate’s new chat-based AI service, Kanana, which goals to launch a closed beta service subsequent yr, is receiving a mediocre market response because of its restricted knowledge allocation, per native media reviews.
In different latest information, Kakao’s chairman and founder, Brian Kim, was granted bail in October after 100 days of arrest for alleged involvement in inventory manipulation.