The mobility platform market in South Korea is expected to witness a contest of novelty and financing after fintech and car-sharing pioneers Toss and Socar formed an alliance to challenge dominant player Kakao Mobility and formidable behemoth formed between wireless leader SK Telecom and multinational Uber.
The Toss-Socar alliance will introduce a new mobility platform service within this year based on their rich customer base - 20 million financial app Toss users and 9 million taxi-hailing Tada and car-sharing Socar app users.
The alliance will also enhance Socar and Tada’s subscription-based services.
“Various services and products will be introduced to bring synergy to the new mobility service by leveraging on subscribers of the two companies,” said an unnamed Socar official.
“We will show how consumers can achieve new value onboard a taxi by the end of the year,” he said.
Viva Republica Inc., operator of financial app Toss, last week acquired a 60 percent stake in VCNC, a subsidiary of Socar that operates ride-hailing service Tada. Toss had begun app-based banking service from beginning of this month.
The joint venture of fintech and ride-sharing pioneers could pose as formidable challenge to industry leader Kakao Mobility and equally-strong newcomer SK Telecom in partnership with global behemoth Uber.
The latest stake acquisition decision was made in a strategic move by Lee Seung-gun, founder and chief executive of Viva Republica, and Park Jae-wook, chief executive of Socar. Lee has been seeking for new businesses that can create synergy with the company’s mainstay financial technology business while Park has been looking for a partner with funding power to survive in the competition with giants.
The Korean mobility market has received heated interest from overseas capital.
Last year, SK Telecom attracted hundreds of billions of won in investment from Uber, and its subsidiary T Map Mobility and Uber established a joint venture called UT LLC in Korea.
Kakao Mobility also attracted funding from global private equity funds like Texas Pacific Group and The Carlyle Group as well as from Google.
The coalition between local players could be equally appealing, market analysts said.
Tada can apply Toss’s simple payment service to its payment, while Toss can utilize Tada’s mobility-related data in own insurance, loans, and credit review services.
The SK Telecom-Uber alliance is also advancing into diverse mobility services in addition to its taxi-hailing service. The joint venture UT will come up with an integrated taxi-hailing service app. Uber Taxi will also be called Uber Taxi and be managed under UT app.
The SK Telecom-Uber partnership has its strength in that the app can be used not only in Korea but in other countries through Uber service. T Map Mobility is also accelerating entry into comprehensive mobility platform by expanding services from navigation to logistics.
Industry sources expected competition in the Korean mobility platform market to intensify further in the year end upon new Tada service and UT app officially launch their services.
Kakao Mobility operates 26,000 affiliated taxis as of August, while Tada has about 1,300 taxis, and UT operates far less than Kakao.
By Oh Dae-seok and Lee Eun-joo
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]