Daum Kakao, the maker of South Korea’s most popular messaging app, launched KakaoTaxi in Korea today. The new service is a potentially strong competitor to Uber and is the beginning of Daum Kakao’s initiative to extend online-to-offline products to the 48 million active monthly users of KakaoTalk.
KakaoTaxi is currently available in Korea for Android, while an iOS version will be released in April. Users can sign up for the service by using their KakaoTalk account.
Like other Asian messaging apps such as WeChat and Line, Daum Kakao is eager to transform KakaoTalk from an SMS replacement into a lifestyle services platform. The company describes KakaoTaxi as its “first attempt at offering online-to-offline connections.”
As an example of the direction KakaoTalk can potentially go if it adds more services, Line also offers food-ordering and music streaming, while WeChat users can pay their utility bills through the app. Both have already entered the taxi-calling business: Line currently offers LineTaxi in Japan, while WeChat lets users call and pay for taxis directly through the app.
KakaoTaxi may have an advantage over Uber because of the latter’s regulatory challenges in Korea. Earlier this month, Uber was forced to suspend its peer-to-peer ride sharing service UberX because it did not comply with local transportation regulations.
Although UberBLACK and UberTAXI are still available in Seoul, the company also faces another major legal headache: several executives, including founder and CEO Travis Kalanick, have been charged with breaking transportation laws, including ones that require all of the company’s drivers to be licensed taxi drivers.
Steps Daum Kakao has taken in order to avoid the same problems as Uber include hiring only licensed taxi operators. It also signed an agreement with the subway card maker Korea Smart Card Corp., which is partially owned by the government. Not only does the deal give KakaoTaxi some measure of government support, but it also lets the service track the flow of commuters in Seoul, which helps it figure out where to deploy cabs, and allows users to pay for rides with their subway passes.
Further more, KakaoTaxi has also signed memorandums of understanding with organizations representing licensed taxi companies and drivers, including the Korean National Joint Conference of Taxi Association, the Seoul Taxi Association, the Federation of Korean Taxi Workers’ Union, and the Korean Taxi Workers’ Union.
Factors that might help KakaoTaxi attract passengers who are already accustomed to using Uber include several very similar features.
As with Uber’s app, KakaoTaxi automatically sets the user’s location as a pick-up spot and finds the fastest available cab based on traffic, distance, and estimated time of arrival. Then it sends the driver’s name, photo, and vehicle description to the passenger, and push notifications about its progress toward them. During the ride, passengers can send notifications to their friends letting them know their current location.
Passengers and drivers are allowed to rank one another, a two-way rating system that Uber also uses.
KakaoTaxi includes some privacy safeguards, including an in-app messaging system for drivers and passengers that automatically deletes chats after a ride is completed and masked numbers so drivers can contact their customers without seeing their phone numbers.
Though Daum Kakao also operates online payment services KakaoPay and BankWalletKakao, neither of those have been integrated with KakaoTaxi. Instead, users can pay with cash or one of the cards used for other transportation services in Korea or add a credit card.
This is supposed to make the service easier to use for people who don’t have KakaoPay or BankWalletKakao accounts. In a FAQ, Daum Kakao says they decided not to add one of their payment services to the app in order to “streamline the KakaoTaxi experience as much as possible for many users.”