Uber Technologies claimed on Wednesday that its ride-sharing mobile app runs legitimately in South Korea and benefits consumers and drivers, in response to efforts by the city of Seoul's to ban the service in July for violations of local taxi regulations.
Under the current law, people who solicit a ride using a private or rented car could be sentenced up to two years in jail or fined 20,000,000 won (about US$19,000). In April the city fined a driver 1 million won for providing an Uber ride using a rented car. The city additionally criticized the ride-hailing service for lacking proper background checks of drivers and failing to provide appropriate insurance for users in case of accidents.
But at a media briefing in Seoul on Wednesday the head of Uber's Asia business, Allen Penn, said the company only partners with licensed companies and drivers, and is only a technology platform that matches rides with end users.
"We see this type of discussion around the world. The regulations are outdated. The regulations have existed since long before we began carrying around smartphones in our pockets," Penn said. Uber is willing to have a conversation on how to better structure the regulations in technology-driven world, which should be pro-innovation, pro-business and pro-competition, he said.
Uber launched in Seoul last August, offering its on-demand ride service UberBLACK, with premium black cars such as the Hyundai Equus, Mercedes S or E Class, or BMW 7 series. Regular cab fares there usually start at 3,000 won (about $2.90) and the premium vehicles at 4,500 won, whereas Uber starts at 5,000 won.
Despite the price tag, Uber has attracted regular users in Seoul with its simple steps for users from finding a cab to making payment. The transaction is cashless, with a pre-authorized credit card. Beyond convenience, the company boasts about its safety service by providing driver's ID and vehicle's number as well as a rating system.
The Silicon Valley company also argued that it has benefitted the drivers and ultimately cities globally. Just a month after the launch in Seoul, the service lifted the drivers' income up to 40 percent a month, the company said in a statement.
On the other hand, it triggered a backlash from the existing taxi business by adding competition in an already saturated taxi market in Korea.
"The taxi industries are squeezed with flat rates, rising gas price and the favorable policies toward public transportation, and now Uber is running a newly invented, illegal taxi business, collaborating with big renting car companies," said Lee Sang Taeg, manager of the Seoul Taxi Association, in a statement. "A legitimate game company could still lead to speculative games that are illegal. Similarly, Uber is not illegal, but it has prompted illegal riding services."
Protests have already taken place across Europe in cities including London, Berlin, Paris and Madrid. Berlin and Brussels courts have banned the riding app in April.