KakaoT Withdraws Fare Increase Proposal After Raising Taxi Call Fee to 5,000 Won

[Asia Economy Reporter Kang Nahum] Kakao Mobility, which had raised the fare range for its 'Smart Call' service up to 5,000 won, has decided to withdraw the increase plan after facing public backlash.

On the 13th, Kakao Mobility announced that it would readjust the fare range of the Kakao T Taxi 'Smart Call' dynamic pricing system from the current '0 won to 5,000 won' to '0 won to 2,000 won.' ▶Refer to our exclusive report on August 4th: [Exclusive] Kakao Taxi Raises Fast Dispatch 'Smart Call Fee' Up to 5,000 Won

Kakao Mobility explained, "This feature was introduced to motivate drivers to accept calls more actively during times or in areas where it is difficult to catch a taxi, but there were concerns that it could increase the burden on users. We have decided to operate the dynamic pricing system by limiting the upper limit to not exceed the previous cap of 2,000 won in response to such opinions."

They added, "We also listened to opinions that the Kakao T Bike fares increase the burden on mid-to-long distance users and plan to readjust the fares in a way that does not increase user costs. We apologize for the confusion and inconvenience caused by the fare restructuring."

Kakao Mobility has been applying the dynamic pricing method to Smart Call since the 2nd. Smart Call is an artificial intelligence (AI) dispatch system that increases the success rate of taxi calls.

While the existing free call method sends information sequentially to taxi drivers located near the user, Smart Call analyzes expected distance and time, past driving patterns, traffic conditions, and more through AI to increase the probability of a response. Because of this, many users have paid a premium of about 1,000 won (2,000 won at night) to use this service when taxis are hard to find on the Kakao T app.

Subsequently, Kakao Mobility raised the Smart Call fee up to 5,000 won, and in some cases, users had to pay a call fee higher than the basic taxi fare (3,800 won), which led to backlash from users and the industry.

The four taxi organizations (National Taxi Labor Union Federation, National Democratic Taxi Labor Union, National Private Taxi Transport Business Association Federation, and National Taxi Transport Business Association Federation) issued a statement on the 11th, criticizing, "From the perspective of passengers using taxis, this is no different from a fare increase," and added, "The platform monopoly company, which controls the entire taxi industry including direct management, franchises, and brokerage businesses, is showing extreme arrogance."

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