South KoreaLogistics and transport2019 – ongoingKakao Mobility
AI taxi dispatch on Kakao T
Kakao's franchise taxis grew to a 73.7% share under its AI dispatch; a KRW 27.1 billion fine for favouritism was later cancelled in court
Problem
Kakao Mobility, which handled more than 90% of app-based general taxi calls in Korea, launched its own franchise taxi brand, Kakao T Blue, in March 2019. It needed the franchise drivers to earn enough to keep joining, while still serving passengers quickly.
Approach
Calls were first assigned by estimated arrival time, and from April 2020 the app gave priority to drivers recommended by an AI model, open only to drivers with high acceptance rates. In February 2023 the Korea Fair Trade Commission ruled that the logic covertly favoured Kakao T Blue drivers, whose acceptance rates were far higher by design, and imposed a fine finalised at KRW 27.1 billion. Kakao Mobility denied manipulation, and on 22 May 2025 the Seoul High Court cancelled the corrective order and the fine.
Results
Takeaway
The regulator said criteria such as acceptance rate structurally favoured the platform's own fleet; lawyers commenting on the ruling said the court weighed automated dispatch's benefits for users. The two bodies read the same rule differently in a platform that both ran the algorithm and competed on it.
Categories
- Size
- Large enterprise
- Industry
- Logistics and transport
- Business function
- Production and qualityStrategy and organization
- Innovation type
- Business model innovationProcess innovation
- AI technology
- OptimizationRecommendation and personalization
- Adoption
- Built in-house
- Evidence
- Regulator, audit or court
Sources
Source summaries
Reports the Fair Trade Commission's provisional KRW 25.7 billion fine and how the dispatch logic changed from arrival-time dispatch to AI-recommended drivers filtered by acceptance rate in April 2020. It cites the regulator's figures that franchise drivers got 35–321 more calls a month than others and that Kakao T Blue grew from 1,507 cars (14.2%) at the end of 2019 to 36,253 (73.7%) at the end of 2021. Kakao Mobility said it regretted the decision and would go to court.
Reports that the Seoul High Court's administrative division ruled for Kakao Mobility on 22 May 2025, cancelling the corrective order and the KRW 27.1 billion fine. Kakao said the ruling confirmed it had not discriminated between franchise and other drivers. The regulator said it would review the judgment before deciding on an appeal.
Lawyers interpreted the ruling as recognising that dispatch ran automatically through an AI system without artificial intervention and that the system benefited users. Dailian reports that the fine was set provisionally at KRW 25.7 billion and finalised at KRW 27.12 billion.
Full details are in the original sources.
