Concerns are growing among consumers and small business owners over the addition of “service option” charges for Kakao Taxi’s taxi hailing service.
Kakao Mobility, a subsidiary of Kakao, plans to add paid-call service features such as “Advanced Call” and “Immediate Dispatch” to Kakao Taxi by the end of this month.
Using AI integrated tools, the “Advanced Call” feature will connect the customer to a cab driver who is most likely to accept the call, thereby enabling quicker pick-ups.“Immediate Dispatch” is a feature that allows users to be matched to the nearest empty cab.
Both services come in the form of additional fees, in addition to the actual taxi fare. According to Kakao Mobility, the charges are expected to be 1000 won (2000 won during late-night hours) higher than the current market rate for taxi calling fees.
Although not finalized, the fees for “Advanced Calls” and “Immediate Dispatch” are expected to be 2000 won and 5000 won, respectively. Kakao Taxi has insisted though that the free calling service will be operated as usual with “regular calls.”
Critics of the extra charges say they are concerned that it will be difficult to get a taxi. One consumer criticized the company by saying, “Are we supposed to pay a premium price in order to catch a normal taxi?”
Consumers also point out that such discriminatory monetization practiceswill eventually lead to a rise in the overall costs. Small business owners also say that Kakao Taxi is behaving like a typical “big company,” taking control of the market through free calls and then raising the prices through dominance.
In a recent statement, the Korea Federation of Micro Enterprise (KFME) warned about the possibility of a side effect saying, “It will be difficult for passengers to catch a taxi because taxi drivers will only pick up“premium” customers who will pay the extra price, thus regrettably forcing normal passengers to pay the extra “premium” fees.”
Some in the federation said, “Some experts predict that the same price differentiation policy will be introduced to the designated-driver service market, which is rapidly eroding the market through Kakao drivers,” further adding, “There is a high concern in the designated-driver service that in the long run, the drivers of the service will be forced to pay fees in order to get selected as a driver for the premium designated-driver service.”
Kakao explained that by introducing a point system, which can be accumulated according to the service history and the number of cases, customers will be able to get taxis without using the paid services. Since the points accumulated can be exchanged, there will be no reverse discrimination as additional revenues can be made based on performance regardless of the amount of expenses.
Kakao is denying the fact that the service is being expanded into a designated-driver service. In addition, Kakao explained that if problems actually occur, it will be promptly corrected.
