KakaoTaxi Revolutionizing Korea’s Taxi Service

The company Kakao is famous for the chatting application KakaoTalk and recently it expanded in other mobile services. A very exciting mobile service is KakaoTaxi, a taxi-hailing app that has been introduced a half year ago and already dominates the Korean market. This blog post is going to explain KakaoTaxi, provide a personal experience and take a look at the potential of KakaoTaxi.

 

Revolution of Taxi Hailing System

In Korea it’s possible to call a taxi to a designated spot through a complicated, time-consuming process: First, a user calls the taxi company that offers such a service. You tell them where you are and where you want to go. Then they say that they’ll search for a cab driver and usually a minute later or so the cab driver calls one back. Then you have to explain him where to pick you up which is always a hassle. And on top of that is a 1,000 KRW service surcharge. Call-taxi (콜택시) is how it is called in Korean.

Since this year, the Korean company Kakao revolutionized the call-taxi service through a new service: KakoTaxi.

Here you can see a commercial of KakaoTaxi on a Seoul taxi:

Kakao invited taxi drivers to register for an app where they had to share car details, business registration and upload a picture of them. Then the official KakaoTaxi app for users was launched on March 31st, 2015.

Users can download KakaoTaxi here:

• Google Play KakaoTaxi
• App Store KakaoTaxi

The installation is very easy because it automatically imports all necessary information. It may be not available in countries outside Korea, so be sure that your store settings are set to Korea.

After three months Kakao published some numbers about the popularity of the taxi service: 80,000 registered taxi drivers, 1.5 million app downloads and 2 million trips within the first 80 days. Every day around 150,000 taxi calls are made through KakaoTaxi. The numbers are amazing.

 

Personal Experience with KakaoTaxi

I have to admit that I use taxis only thrice a year and so I can only talk about a single experience with KakoTaxi. Anyway, during a short vacation in Ulsan I tried KakaoTaxi for the first and only time so far. After I opened the app, I selected the departure point and destination. KakaoTaxi sent out the call and it just took a couple of seconds until a driver responded.

This pictures show how it looks like after a driver picked up your call (from left to right):

(1) the driver begins to move to my desired departure point;

(2) the app showed me in real-time where the taxi vehicle is and told me that it’ll arrive very soon;

(3) after getting on the car the driver confirms that he picked us up and the app gives me information on the car and how long the ride will take (in this case 20 minutes) and

(4) after arriving at the destination, I paid with cash according to the amount on the meter and then the app asks to evaluate the driver.

 

The taxi driver in Ulsan said that he doesn’t see the destination when he receives the call. After he picked me up, then his phone showed him the destination:

The screen above shows two buttons: The upper button opens a navigation app called Kimgisa and the other button informs KakaoTaxi that the destination is reached. My taxi driver said that he used the app since the beginning. His company and Kakao promoted the service.

My experience as a user was very positive. KakaoTaxi almost instantly connected me with a driver. Using the app is very simple. Sam from 10원 Tips had some issues with KakaoTaxi (and here a second review).

Once a friend tried to get a cab through KakaoTaxi in downtown Seoul in the late evening but even though the call was sent out to over 80 taxis, no taxi responded. I don’t know how well KakaoTaxi works in busy spots like Gangnam or Hongdae on weekends.

 

KakaoTaxi has NOTHING to do with Uber

A month before KakoTaxi was launched, Uber Korea’s office was raided and they had to stop offering UberX, the ridesharing service of Uber. Many news articles mention Uber when they talk about KakaoTaxi like there’s a connection between them. For example here in Tech Crunch about KakaoTaxi or here Kakao is challenging Uber at ABS-CBN. But KakaoTaxi has as little to do with Uber as Uber has to do with the sharing economy. Yes, Uber isn’t a part of the sharing economy. KakaoTaxi connects people to licensed taxi-drivers, who are allowed to transport passengers and receive money for that service. This wasn’t the case for UberX. Uber still offers the UberBlack, the limousine service, in Seoul.

 

Future of KakaoTaxi

There are no fees for a taxi driver or for a user. Some might wonder why is Kakao offering this service then? What is the business model behind KakaoTaxi? Of course, they collect data about trips and taxi movements and who knows for what kind of future project they may use this big data. Then Kakao has a mobile paying service with the name KakaoPay. Currently, it’s impossible to pay through the KakaoTaxi app but in the future experts believe that they are going to connect KakaoTaxi with KakaoPay. For now, the most important thing for Kakao is to dominate in the taxi-hailing market. KakaoTaxi works great in Korea and I don’t see any reason why it shouldn’t work in the same way in other countries.

KakaoTaxi revolutionized the taxi hailing system. More long-term observations are necessary to analyze improvements of the service. Does the rating system have any effect on the behavior of the drivers? Is KakaoTaxi connecting users to high-rated taxi drivers?

 

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