Prosecutors in South Korea have charged Uber Technologies Inc chief executive Travis Kalanick and the head of its domestic business partner MK Korea Co with violating a transportation law.
San Francisco-based Uber is facing growing legal challenges as it expands in Asia amid mounting protests from taxi operators.
The Seoul Metropolitan Government said this year it might ban Uber’s service and similar applications on grounds they are unsafe and compete with licensed taxi services, and from next week will offer rewards of as much as 1 million won (US$905) to people who provide information on Uber’s services.
Uber’s South Korea unit and MK Korea illegally operated rental cars as taxis, an official with the Seoul Central District Prosecutors’ Office said by telephone yesterday, asking not to be identified, citing internal policy.
Uber said it will fully cooperate with the investigation and is “confident” that the court will uphold “a fair and sensible judgement’’ in the case.
“We firmly believe that our service, which connects drivers and riders via an application, is not only legal in [South] Korea, but that it is being welcomed and supported by consumers,” the company said in an e-mail distributed by its South Korean public relations representative.
Uber, which raised US$1.2 billion earlier this month at a valuation of US$40 billion, said in August it had sought a legal opinion and that its Seoul service obeys the law.
Opposition to its operations is down to outdated regulations that precede smartphone and wireless technology, Allen Penn, the company’s head of Asia, told reporters at the time.
Paid transportation with unregistered vehicles is “clearly illegal activity,” the South Korean Ministry of Land, Infrastructure and Transport said later that month.
The maximum penalty for Uber’s alleged legal violation is a two-year prison sentence or a fine of as much as 20 million won, Yonhap News reported.
Uber, which according to its Web site operates in 53 countries, started its service in Seoul last year.
It competes with local taxi-hailing apps such as NaviCall, run by a unit of the nation’s largest mobile telecom SK Telecom Co, which connects users with registered taxis.
“Uber does not believe it is appropriate for authorities to seek to punish drivers who are trying to make a living through this service,” Uber said in yesterday’s e-mail.
The Seoul Metropolitan Government has said it plans to launch its own smartphone-based cab-hailing service using taxi operators.
Last week, Uber’s services were declared illegal in Taiwan.
In addition to worries over the safety of consumers following reports of rape in New Delhi and Boston, Taiwanese officials are concerned about how Uber collects and manages personal data, including the name, credit card number, location and the route, Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) said in an interview.
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