Kakao acquires taxi franchise company to beef up taxi-hailing service

18, Sep. 2019

SEOUL, AJU - The mobility wing of Kakao has acquired 100 percent stake in South Korea's largest taxi franchise to boost its app-based taxi-hailing service which automatically distributes taxis to customers without the need of revealing a destination.

Kakao Mobility said in a statement on Tuesday that it has acquired a 70 percent stake in Tago Solutions, a taxi franchise which operates some 4,500 taxis. Previously, Kakao had owned 30 percent of Tago to launch “Waygo Blue”, a new taxi-hailing service designed to ease a taxi shortage in busy commuting hours.

Kakao Mobility acquired Tago Solutions to broaden Waygo Blue's presence in the domestic market.

Kakao had planned to provide a ride-hailing service in December last year but the launch of the new service was put on hold due to strong protests by taxi drivers. Kakao and taxi industry representatives came to a settlement in January this year through government-brokered negotiations to allow the operation of Waygo Blue.

Taxi-hailing services have experienced a common problem due to customer complaints about taxi drivers selectively receiving calls depending on distances.

Waygo Blue was launched in April this year targeting the niche market by providing an auto taxi distribution service. With a basic fee of some 3,000 won ($2.52), customers can call taxis without entering destinations.