KOTI - Korea Transport institute

Top Korean tech firm Kakao already operates a ride-hailing app called Kakao Taxi, which allows users to connect to yellow cabs. Ride-sharing apps have been outlawed in Asia's fourth-largest economy since 2015. Small startups have still faced regulatory issues, however — rideshare app PoolUs was sanctioned in 2017 for interpreting “commuting hours” too loosely, and had to lay off 70 percent of its employees. A startup called Luxi also faced issues, and was sold to Kakao in February this year, perhaps sparking the tech company’s push into the space. Tada, which launched just last month, has tried to avoid some of these hurdles with a new business model using shared 11-seater vans instead of personal cars.
Revenue in the ride-hailing sector amounts to US$528m in 2019 and is expected to show an annual growth rate (CAGR 2019-2023) of 7.1%, resulting in a market volume of US$694m by 2023.
However, ride-hailing network companies are still illegal in the Republic of Korea under the Passenger Car Transport Law.
We offered restructuring solutions for the legal framework and analyzed multiple scenarios to prevent bigger conflict, based on legal research and referring to foreign legislative cases and lawsuits. In order to protect taxi drivers we suggested a passenger service levy for the ride-hailing company to provide a compensation package for the taxi industry.