Kakao, the $7 billion parent company of messaging app KakaoTalk, released more details on Tuesday about the planned launch of a premium taxi app, as it tries to monetise lifestyle platform businesses.
KakaoTaxi Black will start off with a test run connecting users to a fleet of 100 cars through the end of this year while the company awaits final approval from the Seoul City government, when the service will then be expanded.
KakaoTaxi Black appears to be a souped-up version of Kakao's existing ride-hailing app. So far the "taxis" include Mercedes E-Class Sedans and Lexus models, in contrast to the natural gas-powered Hyundai Sonata and Kia Lotze models that the vast majority of Seoul cabbies drive
KakaoTaxi Black users will send a request for a ride to a specific destination from their smartphone using the app.
The drivers will be professionally licensed and wearing a suit, much like a limousine service driver. The ride will even come with a complimentary beverage.
The catch is the high-end cab will cost about three times the price of regular cab, the company said. So, a ballpark figure could be about 45,000 won ($37.50) for a crosstown trip in Seoul that would normally be priced at around 15,000 won ($12.50). The base fee is 8,000 won ($6.60).
KakaoTaxi Black could presage future efforts to strengthen the company's profit sources, since it has posted rather weak financial results for the past two quarters. That said, Kakao is a local success story, growing from a fledgling startup to South Korea's second-largest IT venture after Naver Corp.
It merged with search portal Daum last year and spun off games and innovative businesses from its mobile-based platform. Intensifying competition in the industry has since burdened the firm with heavy marketing costs and anemic profits.
John Jung, Kakao's chief business officer and the executive in charge of KakaoTaxi, said during a media briefing on Tuesday that while the concept is quite new to South Korea, premium taxis already take up 27 to 30 percent of the worldwide taxi market.
Kakao launched its existing ride-hailing app after it inked a three-party MOU with the Seoul Taxi Association and a major taxi company. The premium taxi drivers will be regular employees of the taxi company, Kakao said.
As of this month, Kakao said it has about 160,000 drivers registered with KakaoTaxi, which has accumulated 30 million calls since it launched in March, and receives 300,000 requests on a daily basis.