[Exclusive] Kakao Mobility Moves to Appease Taxi Industry, Revises Partnership Agreement

Kakao Mobility, which accounts for 80% of the nationwide franchise taxi market, is revising the contracts it signs with franchise taxis.

On the 16th, according to Kakao Mobility, it decided to delete the clause in the taxi partnership agreement that states "it can be changed every three months by written agreement of both parties." This move aims to further accommodate the demands of the taxi industry while emphasizing mutual growth.

In the case of the franchise taxi "Kakao T Blue," the franchise contract is signed with KM Solution, a subsidiary of Kakao Mobility, while the partnership agreement is signed directly with Kakao Mobility. The partnership agreement is a contract where Kakao Mobility provides roaming operation data and participates in various service promotions and brand marketing exclusively to franchise member companies in exchange for fees. This is separate from the franchise contract signed by KM Solution.

For example, a franchise taxi generating monthly sales of 2 million KRW pays a 20% franchise fee of 400,000 KRW to KM Solution. Then, as compensation (activity fee) for providing data and other services, it receives 300,000 KRW from Kakao Mobility. Ultimately, from the taxi driver's perspective, it feels like they only pay about 5%, or 100,000 KRW, as a fee to the company. However, since the activity fee varies individually, the usual fee rate is around 3.3% to 5%.

The taxi industry has raised concerns about the partnership agreement being only three months long compared to the five-year franchise contract. If the three-month partnership agreement expires or changes, it affects the activity fee and increases the fee burden. Last year, the taxi industry even submitted a petition to the Fair Trade Commission. They worried that "the fees paid by franchise taxis could unfairly increase."

This issue recently surfaced in the National Assembly as well. On the 8th, Jeon Hye-sook, a member of the Democratic Party of Korea, pointed out at the Budget and Accounts Committee plenary session, "If the contract is fair, shouldn't the partnership agreement be signed for five years at a fixed amount, just like the franchise contract?" She added, "Taxi operators are worried that the partnership contract terms change every three months, causing them to pay more fees. This is an example of unfair practices."

As the controversy continued, Kakao Mobility ultimately decided to delete the clause altogether, intending to end unnecessary disputes. Recently, under the leadership of Kim Beom-su, chairman of Kakao's board, the Kakao community prepared a mutual growth plan. Kakao Mobility also introduced measures such as abolishing the smart call service, which was embroiled in price hike controversies (▶Refer to our August 4th article), and lowering prices for the pro membership for taxi drivers. By abolishing this partnership contract clause, they have taken a further step back to accommodate the taxi industry's demands.

A Kakao Mobility official said, "We have decided to actively accept the taxi industry's opinion that the current contract method could be disadvantageous to taxi operators, as well as the criticism from Assemblywoman Jeon." They added, "We plan to continue discussions on the contract change application method, partnership agreement duration, and various other opinions from the taxi industry through the 'Franchise Mutual Growth Council (tentative name).'"

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