One thing South Korea is quite well-known for is its drinking culture. In terms of number of liquor servings consumed per week, South Korea ranks first, outdrinking countries like Russia and the U.S. As a reflection of this, the country has a rather large market for designated driver (DD) services.
Since the enforcement of police sobriety checkpoints in the 1980s, the market for DD services has grown into what is now worth $4 billion in annual sales with around 8,000 providers. The average number of requests for DD services is now estimated to be between 400,000 and 700,000 per day.
Most DD service companies in South Korea still assign drivers to customers only via the telephone. Customers call a number to verbally inform dispatchers of their pickup location, which, considering the customer’s level of alcohol intoxication and the labyrinthine streets of Seoul, made it difficult for drivers to reach their customers on time. The 35-year-old industry is now evolving to better serve a market heavily populated by smartphone users. Companies now solve driver assignment problems with smartphone applications, which can leverage online tools such as GPS navigation and credit card payments.
The introduction of such tools has helped reduce some frictions of telephone-based DD services. While GPS systems help drivers locate their customers more easily, electronic payments save users from the inconvenience of cash transactions and allow companies to introduce customer loyalty programs.
Currently, as much as 90% of the market is owned by three companies – Korea Drive (owner of 1577-1577), Button Technology, and JoyNDrive. These providers, along with around 300 others, have been the first group of companies to add smartphone apps to their existing services, which allow customers to request drivers with a single touch of a button.