Wandering sales, collection through other apps...Daegu-Gyeongbuk Kakao Taxi Headquarters Sanctions

The Kakao Taxi franchise headquarters in Daegu and Gyeongbuk Province was sanctioned by the Fair Trade Commission after signing an unfair contract with drivers to excessively collect platform fees using their trading status.

The Fair Trade Commission said it will impose a fine of 228 million won on DGT Mobility, which received the membership fee, along with a corrective order when taxi drivers roamed on the street and picked up passengers using apps other than Kakao T apps through unfair contracts.

From November 2019 to the present, DGT signed a contract to collect 20% of the total fare from affiliated taxi drivers in the name of platform fees and royalties, and received 20% of the total fare checked on the meter regardless of whether or not to use Kakao T-app.

As a result, affiliated taxi drivers were forced to pay 20% of the fare unconditionally as membership fees even if they were carrying passengers through other taxi calling apps or for roaming businesses without apps.

The amount illegally collected by DGT is estimated to be worth 28.2 billion won from January 2020 to September 2023.

The FTC also plans to complete sanctions on KM Solution, another franchise headquarters of Kakao Mobility, which has continued contracts in the same form as DGT in the rest of the region except Daegu and Gyeongbuk, within this year.

Kakao Mobility plans to clarify that there was no violation of the law through an administrative lawsuit in defiance of the FTC sanctions.

Kakao said, "We have provided all infrastructure equally to Baehoi sales," adding, "If lower fees are applied to Baehoi sales, it is likely to create an environment where it is easy to choose, leading to poor service quality and deterioration of member companies' profits."