Daum Kakao will release taxi-hailing app in South Korea

Daum Kakao aims to launch the service, Kakao Taxi, in the first quarter of 2015 with two separate apps: one for the taxi drivers, which will be out first to recruit enough cabs to the service, and another for passengers, the company said Wednesday. The service will be available across the country and the apps will run on both Android and iOS, it said.

Global ride-sharing service Uber Technologies has faced strong resistance in South Korea. The government vowed to ban it last July, calling the service illegal as it can be used by unlicensed drivers to run rental vehicles for a commercial purpose. The San Francisco company went on to open its Uber Black limousine hire service in Korea in August, adding Uber Taxi in October and Uber X in December.

Local taxi operators opposed the service as it posed a threat to their existing business.

Daum Kakao spokeswoman Kang Yu-kyeong said the company is aware of the issues raised by Uber's arrival, and is working to deal with those concerns in its service. The company didn't disclose details of the fares it will charge for the service.

To bypass local resistance to such services, Daum Kakao signed a deal with the Seoul Taxi Association, which has about 40,000 registered drivers in Seoul city, as well as with Korea Smart Card, a major public transportation payment services provider, to take care of transactions.

Seoul Taxi Association manager Lee Sang-tag said, "We decided to make an official deal with Daum Kakao as its service only connects legal taxi drivers and the users. Uber claims that [it is] not a taxi business, but it is running like one in reality and it should abide by the rules like other taxi services."

City officials said that taxi apps using registered, licensed drivers would not be illegal, but declined to comment further on Kakao Taxi until the launch of the service. The city has previously said it will introduce a similar service of its own by the end of the year, although it has not done so yet.

Daum Kakao was formed in October by the merger of South Korean mobile service provider Kakao and of Daum Communications, the country's second-largest Internet portal. About 37 million South Koreans use its mobile messenger service, Kakao Talk. Beyond the messenger app, Daum Kakao has expanded its business into gaming, e-commerce and online payment.