Uber suspends service in Seoul after months-long row with officials

The ride-hailing service plans to return at some point but only after it's reached an accord with the government.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
3 min read

UberX has officially gone off-road in Korea after a months-long spat with local officials. Uber

Ride-hailing service Uber has finally given in to Seoul officials who have been trying to suspend its operations in South Korea's capital over the last several months.

Uber has discontinued its UberX service -- which charges less than its standard service by using smaller, more fuel-efficient cars -- in Seoul after deciding that the move would be in the "best interests" of everyone involved. This marks a significant change in direction for the company, which has been offering its service in Seoul despite protests from local officials.

"After consulting with Seoul City Transport Division, and taking their advice, we determined it was in the best interests of Korean riders, drivers and the community as a whole to further define our business offerings within the current confines of the regulatory framework, without ambiguity," San Francisco-based Uber wrote in a blog post Thursday.

Uber, a service that allows people to find crowd-sourced rides via a smartphone app, has been working to upend the taxi industry worldwide. Uber has spread to 55 countries since its founding six years ago but has also faced a significant number of legal roadblocks from both governments and taxi companies.

Uber started testing its service in Seoul last year, but before its cars even hit the road, officials warned the company that it would be operating illegally if it went ahead. When Uber started its trial anyway, Seoul authorities said they would arrest drivers operating through Uber.

In December, Uber officially launched its service in Seoul, saying that the issue was mainly due to its service being "a new concept."

"According to a third-party survey, 90 percent of our customers support our service. 95 percent of our users also responded that they already have or intend to recommend the service to family and friends," Uber said of its service in Seoul.

Just weeks after the official launch, prosecutors in Seoul charged the company with violating public-transportation law. Uber CEO Travis Kalanick was specifically cited in the indictment, and if found guilty, could face up to two years in prison or pay a fine of 20 million won (about $18,000).

The same day, Seoul announced a rewards program that would pay people more than $900 to tattle on Uber drivers and users.

Uber's ongoing troubles with Seoul reached a tipping point last month when the company announced that it would offer its car-hailing service for free in Seoul. The move, Uber said at the time, would be designed to establish "a consensus" with government officials in Seoul. Soon after, those officials said it didn't address the real issues and continued to push for a suspension.

The row over Uber's legality is just another in a long line of issues the company is facing around the world. Uber has faced cease-and-desist orders in Pennsylvania and Virginia and was forced to suspend service in Nevada and Portland, Ore., in the face of government resistance. The service was also banned last year from Delhi, India, after a passenger was allegedly raped by an Uber driver. Spain, too, has said the service is illegal.

Earlier this week, officials in the Japanese city of Fukuoka cracked down on Uber, saying that it violates the law by operating an unlicensed taxi service.

In addition to capitulating in its long battle with Seoul officials, Uber has also extended an olive branch to the city's taxi companies. Uber said it will provide all Seoul taxis with free access to its Uber platform for "innovation and enhancement to their services."

Still, Uber has not given up on Seoul. The company's higher-end limousine service UberBlack will continue to operate in Seoul, and Uber says that it hopes to bring back UberX at some point in the future.

"We stay committed to cooperate to reach a compromise with the city and taxi industry, and look forward to working together to bring regulated options to Seoul," the company wrote in its blog post.

Uber did not immediately respond to a request for comment.