South Korea’s ride-hailing industry is entering a new battleground as Kakao Mobility and Uber launch competing membership services. Both companies are pivoting toward subscription-based models, betting that paid loyalty programs will secure repeat customers and provide stable, recurring revenue streams.
Kakao’s Dual Approach
Kakao Mobility, the market leader, introduced Kakao T Members on August 27 with two distinct tiers:
- Mobility Plus (4,900 won / US$3.5 per month) targets frequent taxi users with 3% payback on premium rides (Venti, Black), 5% on bike- and pet-friendly services, plus monthly coupons worth up to 20,000 won for rentals, leisure, and overseas services.
- My Car Plus (5,900 won / US$4.2 per month) is aimed at private vehicle owners, bundling perks such as 10,000 won in parking discounts, weekend/evening parking passes, and 3,000 KakaoNavi points.
By offering benefits that cut across both riders and drivers, Kakao is consolidating its dominance in South Korea’s mobility ecosystem.
Uber’s Counterattack
The company, meanwhile, is rolling out Uber One, its flagship membership program already popular in global markets. Priced identically to Kakao’s Mobility Plus plan, Uber One gives members:
- 10% credits back on select taxi services
- 5% credits on general, deluxe, and eco-friendly rides like Uber Green
- An annual plan at 49,000 won, about 17% cheaper than monthly payments.
This marks the company’s most aggressive push yet into Korea, where it has long struggled due to regulations and Kakao’s entrenched market presence.
Diverging Strategies
The rivalry reflects two distinct approaches:
- Kakao is leveraging its extensive ecosystem—spanning ride-hailing, parking, and navigation—to keep users tied into daily services.
- Uber is pursuing a more straightforward value proposition, focusing on higher ride paybacks to win over cost-sensitive consumers.
For riders, the choice is between Kakao’s convenience-driven ecosystem and Uber’s clear, rewards-focused proposition.
Timing and Competitive Signals
Industry watchers note that Kakao’s announcement came just one day after Uber revealed its Korean rollout. This suggests a defensive play, with Kakao aiming to secure its base before Uber gains traction. Analysts see these subscription programs less as revenue generators and more as loyalty weapons in a high-stakes battle for market share.
The Uber Challenge
At a press briefing, Uber Korea’s general manager Song Jin-woo framed Uber One as a milestone move:
“The rollout of Uber One is aimed at attracting and retaining new customers, and this marks an important milestone for Uber in Korea.”
While Uber has improved service metrics such as supply and dispatch rates, it still faces the uphill task of breaking into a market where Kakao dominates both mindshare and market share.
Global Context
Globally, Uber One has already shown its power. Since launching in the U.S. in 2021, it has grown to 30 million members and generated over $1 billion in annual subscription revenue. By Q1 2024, subscribers contributed nearly a third of total mobility bookings and over 45% of delivery orders. Uber’s strategy now is to replicate this success in Korea, where consumers are already accustomed to app-based subscription models.
Outlook
The head-to-head battle between Kakao and Uber highlights a broader industry trend: ride-hailing companies are transforming from service providers into membership-driven platforms. With the global ride-hailing market projected to surge to $287.6 billion by 2034, loyalty programs will likely play a decisive role in shaping customer behavior and competitive dynamics in Korea and beyond.
