The Fair Trade Commission imposed sanctions on Kakao's affiliate, which had uniformly charged franchise fees even for rides that did not use the platform. Franchise drivers had been paying franchise fees to Kakao even when they picked up passengers on the street or operated through other companies' apps.
On the 28th, the Fair Trade Commission stated that KM Solutions, the franchise headquarters of KakaoT Blue, charged service fees for rides that did not actually utilize the dispatch platform, which it deemed a violation of the Franchise Business Act. It announced corrective orders along with a total penalty surcharge of 3.882 billion won.
KM Solutions, a wholly owned subsidiary of Kakao Mobility, operates the KakaoT Blue brand taxi service nationwide, excluding the Daegu and Gyeongbuk regions. According to the Fair Trade Commission, the company has uniformly collected 20% of total fares as 'franchise fees' in contracts signed with franchise drivers since December 2019. This includes fares generated by the KakaoT app, as well as fares for passengers picked up directly from the street or through other companies' apps.
The issue lies in the fact that the contract did not clearly state that external operating fares were included in the 'fare total used to calculate franchise fees.' As a result, many franchise drivers were unaware that service fees were being charged for rides not using the KakaoT platform when signing the contracts.
The Fair Trade Commission determined that such terms constituted an action whereby the franchise headquarters exploited its superior transaction position to impose unfavorable conditions on franchisees. It particularly noted that charging service fees for fares not using the dispatch platform without any notification was difficult to regard as a normal trading practice.
In practice, KM Solutions has been collecting 20% of the total fares calculated by the meter as franchise fees each month, which also included fares from street cruising or rides through other companies' apps. The Fair Trade Commission stated that this practice imposed an unfair structure that shifted economic burdens onto drivers.
This action follows a corrective measure taken in January against Digit Mobility, the franchise headquarters in the Daegu and Gyeongbuk regions, and extends to franchise headquarters nationwide. As of the end of May 2024, there were a total of 61,715 KakaoT Blue franchise taxis, accounting for approximately 78% of all franchise taxis.
The Fair Trade Commission ordered KM Solutions to ▲ amend the relevant contract terms and establish a service fee calculation method based on platform usage, ▲ prohibit similar actions in the future, and ▲ engage in discussions with the Fair Trade Commission regarding the amendments.
A Fair Trade Commission official noted, 'This measure requires KakaoT Blue, which has a market share of about 80% in the franchise taxi market, to revise its franchise fee structure so that it does not collect fees for services not utilized. It will serve as an opportunity to eradicate unjust franchise fee collection and reduce the burden on franchise drivers.'
In response, a Kakao Mobility official stated, 'The KakaoT franchise taxi service includes not only call mediation but also control, accounting, marketing, and various other infrastructures; therefore, we have been providing the same services even during street cruising or when using other apps.' They added, 'If fees are differentiated based solely on the call mediation function, it could undermine the purpose of the franchise service.' The official continued, 'We will faithfully clarify that there was no legal violation through administrative litigation.'