The Taxi Industry's 'Tada' Emerges... Mobility Battle Kicks Off in Full Swing Next Year

[Asia Economy Reporter Bu Aeri] As mobility companies such as Kakao Mobility, Tada, and Uber enter the taxi industry, winds of change are blowing through the taxi sector. The taxi industry, which has been stuck in place for decades due to entrenched practices and regulations, has this time rolled up its sleeves. Nine taxi corporations in Seoul have partnered with IT companies to directly establish the mobility company 'Jin Mobility.' Jin Mobility's service 'i.M' is a white Carnival taxi. It can be seen as the taxi industry version of 'Tada,' which gained popularity among users with its innovative service.

Taxis Take the Lead Themselves

On the 28th, Jin Mobility CEO Cho Chang-jin explained in an interview with Asia Economy, "The taxi industry itself felt the necessity for change," adding, "If we combine taxi operation know-how with IT technology in line with the trends of the Fourth Industrial Revolution era, we will create greater synergy than anyone else." i.M is easy to understand if you recall 'Tada Basic,' which was operated by VCNC. However, it differs in that the vehicles have been converted to LPG, and it holds taxi licenses and garages. Jin Mobility, a joint venture of nine taxi corporations, holds 750 taxi licenses and owns nine garages in Seoul’s Songpa, Gangdong, and Dobong districts. It is the second largest in the entire Seoul area.

Jochangjin, CEO of Jin Mobility

Previously, Tada faced backlash from the taxi industry for providing a 'quasi-taxi service' without taxi licenses, and after the amendment to the Passenger Transport Service Act, known as the 'Tada Ban Law,' passed, it ceased its Basic business in April. CEO Cho said, "The conflict between Tada and taxis paradoxically showed us a new market," adding, "Tada started with rental cars and inevitably faced limitations, but we have the legal right of taxi licenses."

i.M is currently running a pilot operation in Seoul with 50 new Carnival vehicles. The fare is expected to be about 20% higher than that of mid-sized taxis. Unlike the existing Tada Basic, it allows phone calls and 'cruising sales,' picking up passengers on the street. Also, owning the Songpa garage makes it easy to operate in the main market area of Gangnam, making profitability easier. i.M plans to expand to 1,500 vehicles by July next year. Jin Mobility has eliminated the long-standing taxi industry issue of daily rental fees and introduced a full monthly salary system. This aims to provide drivers with stability and a sense of belonging while improving the quality of taxi services. CEO Cho stated, "Within the taxi quota system, we will transform existing taxi services into convenient and comfortable ones," adding, "We will break away from past customs and change the paradigm of the taxi industry."

Next Year’s 'Franchise Taxi' Battle

With the taxi industry itself entering the mobility platform business, competition in the franchise taxi market is expected to intensify next year. Jin Mobility, which currently operates directly, is also considering entering the franchise business. Franchise taxis operate on a franchise concept where platform companies manage taxi services and receive commissions. The current Passenger Transport Act classifies mobility platform businesses into three types: transport, franchise, and brokerage. 'Transport' refers to ride-sharing services based on rental cars; 'franchise' is a business that contracts with taxi companies to provide standardized quality; and 'brokerage' connects taxis through applications (apps) and other means.

The current franchise taxi market is a battleground between Kakao Mobility’s Kakao T Blue and KST Mobility’s Macaron Taxi. Kakao T Blue operates about 13,000 vehicles, and Macaron Taxi about 10,600. Additionally, the global company Uber, which recently allied with Tada and SK Telecom, has also entered the market. Tada’s franchise taxi 'Tada Light' has expanded its business area from Seoul to Busan and Seongnam. Uber will enter the franchise taxi market next year with 'Uber Taxi,' having secured 579 licenses. CEO Cho predicted, "The mobility business is an industry that will become a new driving force, so much so that it is called the second smartphone business," adding, "The core will be to demonstrate a proper fusion of existing industries and new technologies."

This content was produced with the assistance of AI translation services.