Tada files lawsuit against Kakao Mobility for suspected market manipulation – Korea Bizwire
South Korean mobility service provider Tada has taken legal action against Kakao Mobility, a company accused of engaging in unfair practices that harm competition in the industry. The lawsuit, filed by Tada’s parent company VCNC with the Suwon District Court, alleges that Kakao Mobility directed ride requests to its affiliated taxis while blocking those from rival services, restricting consumer options and stifling market growth.
The legal battle was fueled by Tada’s claim that Kakao Mobility’s actions, including steering ride-hailing requests toward its affiliated taxis, significantly impacted Tada’s business. Specifically, Tada Light, a mid-sized taxi service, experienced a decline in revenue and had to cease operations. These allegations align with the Fair Trade Commission’s ruling from December 2024, which imposed a hefty fine of 15.1 billion won ($11.4 million) on Kakao Mobility for engaging in anti-competitive behavior. The commission found that Kakao Mobility coerced taxi drivers into signing exclusive contracts and penalized those who refused by limiting their ride requests.
This recent legal dispute is part of an ongoing rivalry between Tada and Kakao Mobility. Past allegations from Tada accused Kakao Mobility of aggressively recruiting its drivers, leading them to switch to Kakao-affiliated taxis. In response, Kakao Mobility defended these claims, stating that they provided information to drivers seeking new career paths voluntarily.
A representative from Tada emphasized that the lawsuit was initiated not only to seek appropriate compensation but also to advocate for fair competition within the mobility sector. Kakao Mobility countered these allegations by asserting that their dispatch algorithm prioritizes drivers with higher ride acceptance rates to minimize refusals. They also defended their affiliation agreements with taxi fleets, claiming they were essential to ensuring service quality and preventing consumer confusion.
The legal dispute between Tada and Kakao Mobility underscores the escalating tensions within South Korea’s ride-hailing industry. As competition grows more intense and regulatory oversight tightens, companies are increasingly scrutinized for their business practices. Amidst these challenges, both Tada and Kakao Mobility are vying for market share and regulatory compliance in the evolving landscape of the mobility sector.
