‘Kakao Taxi,’ scheduled to be launched in March, decided not to charge commissions. It is a business model differentiated from the Uber Taxi, which takes part of the taxi fare, paid by users, as commissions. As the burden of commissions is removed, it is expected to attract more users and taxi operators.

Daum-Kakao announced on January 25 that the company went through an internal review process and decided not to add any payment means to ‘Kakao Taxi.’

A Daum-Kakao insider said, “We recently held a meeting with regard to Kakao Taxi service and decided not to connect it to any payment means.”

Many industry insiders predicted that Daum-Kakao would take advantage of its own payment means, such as ‘Kakao Pay’ and ‘Bank Wallet,’ to its O2O (online to offline) connection service, i.e. Kakao Taxi, in order to invigorate its mobile payment means. “We are focused on publicizing the Kakao Taxi service to the general public and making it more convenient to use,” said the Daum-Kakao insider. “We excluded the use of payment means or the collection of commissions from this service.”

Daum-Kakao chose a model different than that of Uber which connects drivers to passengers and receives commissions.

Currently Uber connects drivers to passengers and receives 20% of the fares, making KRW200 billion a year.

Kakao Taxi did not choose the paid-service model now, but some forecast that it will make profits out of advertising or additional services.

An industry insider said, “Kakao Talk started out without any paid-service model, but as Kim Beom-soo, chairman of Daum-Kakao, made Han-Game out of NHN and Kakao, and fee-based models through games out of Kakao Talk, it seems that Kakao Taxi will also secure a certain number of subscribers, and capitalize on the user base to start charging fees for part of the services or add a paid-service model, such as advertising.”

Meanwhile, Daum-Kakao entered into an alliance with the taxi associations of Seoul and across the country, and began to distribute the ‘app’ for taxi drivers’ membership signup and checking taxi calls. It is scheduled to release the ‘app’ for passengers’ calling taxis and car dispatching in March.