Kakao Mobility promises complete overhaul amid controversy

Kakao Mobility will expand its taxi-hailing app to include third-party operators following President Yoon Suk Yeol's criticism of its market dominance. It also denied rumors that its parent company is considering a sell-off.

A taxi operating under Kakao Mobility's Kakao T brand [YONHAP]

Kakao Mobility will extend its taxi-hailing app to include third-party operators following President Yoon Suk Yeol’s criticism of its overwhelming market dominance last week.

The decision was announced on Tuesday ahead of a closed meeting with taxi associations that is slated for Oct. 13.

Kakao Mobility CEO Ryu Gung-seon will take part in the meeting, according to the company.

“Regarding the controversy over the market monopoly, we will focus on improving the quality of mobility service for the general public and create a win-win environment by opening up our Kakao T platform to other taxi-hailing service platforms,” said Kakao Mobility in a press release.

The taxi-hailing app operator pledged to “wholly revamp” its operations and systems.

”On the issue of charging systems, Kakao Mobility has been under a lot of criticism over the level of commission fees and the operational system,” the company said. “Considering the public nature of taxi services, we will work with taxi drivers through meetings to refine and implement a less expensive commission structure.”

Kakao Mobility added that it will “review its franchise taxi business operation from the ground up.”

The business in question was fined by fair trade regulators in February for favoring its own franchise taxis on its platform. The company's dispatch algorithms ensured that its own taxis would receive more calls, regardless of distance, and excluded them from less profitable requests, such as rides of less than one kilometer (0.6 miles).

Kakao intends to finish gathering feedback by the end of this year, and to announce implementation plans immediately after.

Kakao Mobility also said that it “will go beyond the name Kakao to actively pursue overseas expansion,” in order to reinvent itself as a global company.

The firm also addressed rumors of a possible sell-off deal, stating that its parent company, Kakao, is not considering selling it.

The announcement came after the president slammed Kakao Mobility for leveraging its monopolistic position to push up fees.

“[Kakao Mobility] is wiping out competitors by collecting cheaper fees, and then when it monopolizes the market, it jacks up the price,” Yoon said during a town hall meeting with some 60 people on Nov. 1, calling on the company to revamp the charging structure.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]