 |
Photo = Kakao Mobility |
[Alpha Biz= Kim Jisun] Kakao Mobility’s taxi franchise headquarters has been hit with a fine of approximately 3.88 billion KRW (about $29 million) for collecting dispatch platform fees even when affiliated drivers picked up passengers without using the Kakao T app. The company has announced plans to file an administrative lawsuit in response.
On May 28, South Korea’s Fair Trade Commission (FTC) announced that it will impose a corrective order and a fine of 3.882 billion KRW on KM Solution, the operating entity of “Kakao T Blue,” for violating the Franchise Business Act. Kakao T Blue is a taxi franchise service operated by Kakao Mobility, which partners with corporate and individual taxi drivers, providing services such as passenger dispatch via the Kakao T app in exchange for franchise fees.
According to the FTC, since December 2019, KM Solution entered into contracts with franchise taxi drivers requiring them to pay 20% of their total fares as a franchise fee. This fee included a platform usage fee for passenger dispatch through the Kakao T app, as well as royalties, marketing costs, vehicle management software usage, and maintenance of dedicated terminals. However, the contract did not specify that the “total fare” also included fares from rides not arranged through the Kakao T platform.
The FTC determined this to be an abuse of superior bargaining position under the Franchise Business Act, citing unfair contract terms.
As a result, KM Solution has been ordered to revise its contracts to exclude franchise fee charges for rides not involving the Kakao T platform. The fine was calculated as 0.2% of the total 1.9411 trillion KRW in franchise fees collected from drivers.
Kakao Mobility defended its position by stating that it offers a comprehensive “total package” of infrastructure services to all franchise drivers, regardless of whether they use the app for dispatch, and thus denies any wrongdoing.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
