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Taxis may now offer more than just rides

June 25,2019
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The Ministry of Land, Infrastructure and Transport recently approved a license for the taxi franchise business of KST Mobility, which operates the Macaron taxi brand. [KST MOBILITY]
Imagine a taxi grabbing a passenger’s takeout meal before picking them up.

This is becoming a reality.

New mobility services that make use of existing taxis are being released one after another. Macaron taxi, following Waygo Blue, has received government approval for passenger transportation.

The Ministry of Land, Infrastructure and Transport last Thursday announced that it green lighted a transport franchise business for KST Mobility, which runs Macaron taxi.

If a company becomes an operator of a taxi franchise business, additional services can be added to the basic taxi service. It can bolt on features to differentiate itself in the market.

A company could offer a service in which the taxi picks up brunch for the passenger before the picking up of the customer, or the vehicle could be used to ensure that a child is safely delivered to school.

It is the second time the Ministry of Land, Infrastructure and Transport has approved a taxi franchise business since March, when Tago Solutions released Waygo Blue. These taxis, which are called with the Kakao T app, do not reject passengers.

When the first taxi franchise business was approved, Minister Kim Hyun-mee took a special interest in the service.

There are limits. Every new service must be separately approved, for example.

KST Mobility is a mobility start-up established last year by Lee Haeng-yeol, who worked as a team leader for transport and taxis at T-money. At the initial stage, T-money provided funding and then Neoply, a Neowiz Holdings subsidiary, invested. Investment totaled 10 billion won ($8.65 million).

KST mobility took a different approach from Tago Solutions, which was created by 50 existing taxi companies, and VCNC, which started Tada, which rents 11-passenger vehicles. At the end of 2018, KST mobility took over a company that owns 50 corporate taxis and jumped into mobility innovation. KST Mobility is a new type of mobility company, with both the DNA of a taxi business and a start-up culture.

JoongAng Ilbo on last Tuesday interviewed Lee Haeng-yeol, the company’s head, at the headquarters of KST Mobility in Yongsan District, central Seoul.

“I thought destroying a total of 250,000 existing taxis all at once would not be helpful for anyone,” he said.

Lee added that the taxi franchise business is a franchise business like Paris Baguette or Baskin Robbins. Existing taxis can only receive payment based on the distance traveled, but when operating a franchise business, the drivers can offer additional services for extra pay. He said that the taxi franchise concept was first introduced after the revision of Passenger Transport Service Act in 2009, but it went unused.

“Starting from last year, as the innovation of mobility started, the act gained attention again as the only alternative to change the taxi service, which is weighed down by all types of existing regulations,” explained Lee.

JoongAng Ilbo asked what kinds of services could be offered.

He responded that any service is possible on the condition that permission is received from the Ministry of Land, Infrastructure and Transport. He said that basically the taxi driver cannot charge additional fees for distance traveled. It means that the taxi cannot charge more on the grounds that it did not reject passengers.

“Being kind and not asking things are the basics. Our goal is to yield profits through other services,” said Lee.

Macaron taxi, which started with 20 corporate taxis last February, began to let selected drivers with taxi licenses begin to offer services. Since the middle of this month, its taxis can be hailed throughout Seoul. Lee said that the add-on services will be released next quarter.

“Until the end of this month, the taxis under direct control will be expanded to 30. Starting from next month, a total of 100 private and deluxe taxis will be added and operated on our platform. Selection and education of taxi drivers have been finalized already, and we are currently branding the taxis as Macaron.”

Lee said that he is looking into acquiring 80 corporate taxis.

“Aside from Seoul, the model service of Macaron taxi will start in Daejeon with 50 corporate taxis from next month, and the service is also going to kick off in Gimcheon, North Gyeongsang, soon. “

On the reason Lee developed a service unlike any other, he explained that car sharing is supposed to utilize unused cars, but after Uber drivers appeared in New York, traffic congestion was aggravated, and air quality worsened.

“The number of taxis totals 250,000, which is already too many. The government pushed ahead to reduce the number through policy, but it did not work well.”

Lee said that while drivers are criticized, they must be given a chance to change.

He said that those who have a taxi license are verified drivers with criminal records checked by the government.

“Using taxis may not be a shortcut, but innovation that doesn’t get along with society is dangerous,” said Lee. “We think that the path we chose is right.”

Meanwhile, Chacha, a mobility start-up that encountered a crisis when the regulators shut it down, announced on Thursday that it will restart the Chacha van service in August.

Chacha, like Tada, sends the van and the driver together, but it is different from Tada in that it uses the car of the rental car companies, and the driver is the substitute driver.

Chacha Creation signed an agreement with rented car companies in Korea - including Limo Korea and Isaac - to source rental cars.

Over the next month, it is planning to recruit members who will share cars on the Chacha service platform.

When the users of Chacha service apply to use the service through the Chacha platform, the car-sharing member leases the car.

Then the member pages a substitute driver who is recruited from Limo partners.

BY PARK MIN-JE, PARK TAE-HEE [kim.heyu@joongang.co.kr]