[The Editors' Verdict] Was Kakao Mobility Truly Innovative?

The blueprint for innovation at Kakao Mobility has yet to emerge. It is difficult to call it innovation merely by connecting taxis and passengers using the Global Positioning System (GPS). We believed that Kakao was preparing something beyond that. That is why 30 million citizens willingly agreed to provide their sensitive mobility data to Kakao.

Kakao is considering withdrawing from the mobility business. If this becomes a reality, the reason would be one of three possibilities. First, perhaps there was never any innovation in their minds from the start. Their only concern might have been the calculation that making it easier to call taxis or designated drivers through digital technology would easily outpace analog operators. The news of business withdrawal immediately after the decision to ban large corporations from expanding in the designated driver market strengthens this suspicion.

The second possibility is that Kakao also dreamed of innovation but lacks the capability to evolve to the next stage. While the services Kakao has introduced so far have improved our mobility convenience, the fundamental digital environment that made this possible was not actually created by Kakao.

Let us recall what mobility innovation Kakao had proclaimed. In February, Ryu Geung-seon, CEO of Kakao Mobility, presented a direction to achieve mobility innovation by utilizing autonomous driving and Urban Air Mobility (UAM) technologies at a tech conference. The big data secured through Kakao Mobility’s taxi, designated driver, delivery services, and Kakao Navi is expected to have countless applications, and it is reasonable to expect that this will be the foundation for fundamentally changing our mobility culture. Therefore, we did not abandon our expectations for innovation despite providing mobility data and despite Kakao’s market disruption or encroachment on local businesses. Kakao’s sudden halt in the challenge toward innovation without creating any value beyond amassing vast big data can be seen as a betrayal of society’s hopes.

Of course, there are analyses somewhat different from the two possibilities mentioned above in the market. It is said that Kakao sought an initial public offering (IPO) to allow early investors to recover their investments, but due to the current market situation, this has become difficult, so they are considering a sale. There is also a view that the incentive to exit an uncomfortable business that does not generate large profits but only draws social criticism coincides with this decision. Regardless of which reason contributed more to Kakao Mobility’s consideration of a sale, the issue raised for our society is relatively clear. It is a reflection on the process by which new technologies, wrapped in the word innovation, fail to create new markets or added value and become entrenched interests. This is the third possible reason for Kakao Mobility’s business withdrawal.

Kakao, which passed through the icon of innovation as a successful venture company, has already risen to the ranks of large corporations. The nickname “new conglomerate” with over 100 affiliates indicates that Kakao’s reputation has drifted quite far from positive concepts like innovation or evolution. The suspension of the ambitiously started mobility innovation may reinforce this perspective.

Even if Kakao does not do it, someone will eventually present a blueprint for mobility innovation. However, hoping that this achievement comes from a native IT company rather than Google or Apple is not excessive patriotism. Although global companies laid the foundation for digital innovation, does the entrepreneurial spirit to create a second wave of innovation no longer exist at Kakao? The withdrawal from the mobility business might be one of the signs that Kakao has lost its original spirit as an innovative venture. As a large corporation, Kakao must answer society’s questions.

Shin Beom-su, Industry Managing Editor

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