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Asia300

Kakao to roll out ride services in Japan and Southeast Asia

South Korean internet company also keen to buy self-driving startups

Kakao Mobility CEO John Chung explains the company's expansion drive in Seoul on March 13. (Photo courtesy of Kakao)

SEOUL -- Kakao is expanding its transportation services to Japan and Southeast Asia, as the South Korean internet company runs into regulatory obstacles in its home market. 

John Chung, CEO of Kakao Mobility, said South Korean tourists will soon be able to hail taxis through partner Japan Taxi, which has a network of 60,000 cabs. The tie-up service is to start in the second half of this year. 

Japanese tourists can also use Kakao's taxi-hailing service in South Korea, with its 240,000 member drivers.

Meanwhile, the company plans to kick off limousine services in Southeast Asia through easi6, a South Korean startup that offers transportation in the region. Kakao, best known for its popular KakaoTalk chat app, invested 700 million won ($658,000) in the company in December.

Explaining the moves to reporters, Chung said: "South Korean tourists are No. 1 or 2 by number of foreign visitors to Japan. We also expect more demand as Tokyo will host the Olympic Games in 2020."

The Japan National Tourism Organization logged 7.14 million South Korean visitors last year, just behind the 7.35 million from China.

"In Hong Kong, Taiwan and Vietnam, chauffeur driving services are common," Chung added. "We had invested in a platform business operator, easi6, which offers this service, and we will let our customers use this easily in Southeast Asia."

Back home, Kakao is struggling to generate profits through transportation due to the country's tough regulations. South Korea bans ride-sharing services like Uber Technologies, yielding to vehement resistance from taxi drivers.

Still, Kakao -- South Korea's second-largest internet company -- considers personal mobility a priority. Aside from the taxi-hailing and chauffeur businesses, it has expanded into parking lots and GPS services.

Chung said the company is interested in acquiring autonomous driving startups as well, and that it will set up a 20-member lab to study self-driving technology.

"We [will] consider aggressive investments or acquisitions in startups with autonomous driving technology. We plan to develop both software and hardware in self-driving and aim to launch a pilot product soon."

Analysts say mobility services will help to boost the company's performance as they start to become profitable.

"Kakao Mobility kicked off its monetization through taxi services for corporate customers," noted Park Kun-young, an analyst at Kyobo Securities. "They charge 1,000 won per call, which will contribute to sales, considering 10% of credit card revenues in Seoul come from corporate credit cards." 

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