Kakao Mobility Corp., a dominant car rental platform under South Korean app giant Kakao Corp., and SK Telecom’s mobility service provider, TMap Mobility Co., are poised to become the largest employer in the country, beating longtime No. 1 Samsung Electronics Co.
According to sources in the information technology industry, the country’s two largest mobility platform operators will soon sign a collective agreement with a union representing individual drivers who are mostly self-employed or platform workers.
Kakao Mobility and TMap Mobility have faced increasing pressure from the Korean Federation of Designated Drivers to secure employee status to drivers, or designated drivers, working for platform operators.
In Korea, chauffeured driving service is one of the common transportation options along with taxi service, especially for customers who wish to avoid driving while intoxicated. After the two mobility platform giants joined the chauffeur-driven market to replicate the success of their taxi services, competition between the giants and small, designated call-based service providers grew. intensified, and the demand for designated drivers working for the two mobility giants to protect their rights as real employees is increasing.
The months-long negotiation between the two companies and the federation ended when the federation proposed an upper market share limit of 15 percent and 10 percent, respectively, for Kakao and TMap.
The Korean Federation of Designated Drivers has filed a petition with the Korea Business Partnership Commission (KCCP), demanding that the driver services industry be designated as a protected industry for small and medium-sized enterprises, and the KCCP recently launched a preliminary review process to ban operators of major platforms from the market, according to industry sources.
Since it is unrealistic to oust platform operators that already control over 20% of the market, market experts expect the KCCP review process to be used to put pressure on the two mobility platform giants. so that they can reach a collective agreement with the drivers and give them employee status.
If the deal goes through, Kakao Mobility and TMap Mobility will hire 200,000 independent drivers as workers, making it the country’s largest employer, far surpassing Samsung Electronics with 100,000 employees, Hyundai Motor with 70,000 and LG Electronics with 40. 000.
However, it remains to be seen whether the collective agreement will actually benefit taxi drivers, as Korea’s current labor laws do not cover platform workers.
By Jin Young-tae, Yang Yeon-ho and Lee Soo-min
[â Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]