South Korean court fines Uber’s local unit for illegal taxi service

2017.04.26 14:24:18

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A South Korean court has fined the local unit of app-based ride service provider Uber 10 million won ($8,900) for running an illegal taxi business.

Travis Kalanick, founder and CEO of the U.S.-based ride-hailing service Uber Technologies, and its local unit Uber Korea were indicted in late 2014 for offering taxi services in collaboration with a rental-car service operator, which was considered violation of a law prohibiting individuals or firms without appropriate licenses from providing or facilitating transportation services.

The Seoul Central District Court said it took into consideration that the defendants modified issues that were in violation of the law and admitted to the charges, while the plaintiffs pleaded for mercy.

But the hearing for Kalanick was postponed as he did not appear at the trial.

Uber, through its mobile apps, charges fees to play matchmaker between passengers and drivers.

Uber began operations in Korea in 2013 after signing a contract with local car-rental company MK Korea over 20 percent of sales paid to Uber as fee charges.

Soon prosecutors indicted them for violating the Passenger Transport Service Act, where rental-car service operators are banned from offering taxi services. Violators can face imprisonment of up to two years or a fine of 20 million won.

MK Korea was sentenced to 2 million won in fines in 2015 for providing vehicles to Uber.

Uber that is more or less out of service in Korea over legality issue and strong protests from the local taxi industry is said to be in talks with one of existing legitimate ride-sharing local players to have another go in the Korean market, industry sources tipped earlier this month.

By Lee Hyun-jung

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]