BMW and Mercedes-Benz will compete in the local premium taxi market from October as the two German luxury carmakers’ best-selling mid-size luxury saloons were selected for a pilot project last week. 

Seoul City designed the project, partnering with a local taxi association and Daum Kakao, the nation’s biggest messaging company, to provide competition with app-based international taxi service providers like Uber.

According to High&, the Seoul City-invested premium taxi service provider, 50 units of BMW 530d xDrive and 50 units of Mercedes-Benz’s new E350 BlueTEC 4MATIC will offer premium taxi services based on the mobile app-based reservation in the fall. Daum Kakao will soon debut the app.

Previously, Hyundai Motor’s full-size luxury sedan Equus had dominated the nation’s high-end taxi market, but the model has not joined Seoul City’s first premium taxi project.

“Diesel-powered German cars received higher scores in fuel economy and brand value than local ones,” Seoul City said in a press release.

BMW’s 530d xDrive and new E350 BlueTEC 4MATIC are 3.0-liter diesel-powered, high-performing executive cars, meaning that both models can offer powerful and fast rides. BMW’s 5 Series and Mercedes-Benz’s E Class cars also have built their reputation here in terms of ride comfort and cabin quietness.

“Both German carmakers hail the entry to the premium taxi market as their target customers could overlap with premium taxi users,” an industry insider said.

To keep the taxi services from affecting the brand value of luxury carmakers, the new premium taxis will be run differently from existing deluxe taxis on the road.

The mobile reservation-based new luxury taxis will be run like a privately owned car without a meter inside or indicator lamp outside. The only way to identify these cars as cabs will be their yellow license plates, Seoul City said.

High& will also hire drivers exclusively for the new luxury taxis and train them to offer upgraded taxi services.

By Seo Jee-yeon (jyseo@heraldcorp.com)