The number of people commuting to school using public transportation and taxis instead of using their private cars remains steady. Taxis, the most convenient and easy means of transportation for citizens, are also loved. Kakao Taxi (Kakao T), which accounts for the largest portion of taxi platforms, has over 30 million subscribers and 10 million monthly users to provide services to citizens
As more and more people use the ‘taxi platform service’ that allows them to quickly and conveniently catch taxis, there are many complaints of inconvenience. According to a survey conducted by the Korea Consumer Agency on July 21, 52.7%, of many taxi platform users said that “it is difficult to succeed in the dispatch at a certain time” as the biggest complaint. For example, it was difficult to get a taxi at a particular time, such as working hours or weekend evenings for office workers.
In addition, the 1372 Consumer Counseling Center received as many as 483 consumer complaints about taxi platforms from 2018 to March 2022. In particular, more than half were about fares. 34.4% (166 cases) of ‘unfair charges’ and 17% (82 cases) of ‘excessive cancellation fees’ were related to the complaints. Generally, taxi call services incur cancellation fees, and automatic payments are made. However, there was a case where a cancellation fee of 50,000 won was charged.
The cancellation fee after a taxi is dispatched in June 2022 was around 1,000 to 5,000 won per platform. However, if you make a reservation for Kakao Black vehicles or Kakao Venti you will be charged up to 30,000 won if you cancel one hour before the departure time and 50,000 won if you cancel five minutes after the departure time. After imposing such fees, Kakao T accepted the recommendation of the Korea Consumer Agency and immediately took measures to adjust the cancellation fees.
And this inconvenience is not just a problem for consumers. Taxi drivers also bear inconveniences such as compulsory dispatch. After taxi dispatch, Kakao T and taxi affiliates divide the dispatch fee by 5:5. Corporate taxi drivers rarely receive dispatch fees. Also, compulsory dispatch enhances consumer convenience by distributing new passengers nearby before existing passengers get off. However, taxi drivers sometimes engage in illegal activities such as signal violations because they fear passengers will wait due to such a system.
The government is also making policy changes to find solutions, such as a step-by-step policy to resolve the taxi shortage. The step-by-step policy consists of 1 to 3 stages. The first stage is implementing a flexible platform taxi rate system. It is pushing to increase taxi fares from 25% to 100% of the time at night. The second step is to limit the ‘grouping work’ of private taxis and the ‘refusal to call short distances’ of platform taxis. Currently, Korea is operating a three-part system that works two days to control the supply and demand of private taxis and takes a day off. The plan is discussed with the Seoul Metropolitan Government, a local government under its jurisdiction. In addition, Kakao T can refuse short-distance calls because it can know the passengerʼs destination in advance. Instead of allowing platform taxis to charge flexibly, it is considering preventing them from checking their destination before boarding passengers. The third stage is a plan to revitalize ride-sharing platform taxis. It is currently considering expanding ride-sharing platform taxis that allow only 420 vehicles. Hopefully, these measures will be implemented more quickly with the momentum for consumers and taxi drivers to resolve fundamental difficulties as soon as possible.
