By Park Jin-hai
The government Friday told the Seoul Metropolitan Government (SMG) to crack down on Uber’s latest service.
The order comes at a time when the app firm is under scrutiny from prosecutors.
In response, Uber said that UberX, the service in question, is being run as a pilot program with no transactions being made, meaning that technically no law has been broken.
The Ministry of Land, Infrastructure and Transport, however, claims that the service violates the nation’s Passenger Transport Services Act.
“The service solicits rides and receives payment through the use of a private or rented car, so it is not legal,” the ministry said.
The existing Uber Black service hires professional drivers, while UberX can potentially enable anybody to provide taxi services.
“UberX drivers give call-taxi-like services. We also feel that Uber breaks the law since it works as mediator for the illegal act,” said a ministry official said.
Article 81 of the Passenger Transport Services Act stipulates that people who provide a ride with their private or rented cars, and receive money in return, can be imprisoned for up to two years or slapped with 20 million won ($19,361) in fines.
The decision came only one day after Uber announced that it began the UberX service in celebration of its one-year anniversary.
The ministry and the SMG have clashed with the San Francisco-based company since it opened its business here.
Despite escalating disputes, however, no penalties have been assessed against the company since the current law has no specific clauses to make its business illegal.
Uber Technology says that the UberX service is a ride-sharing or carpooling type of service, a similar service to one Seoul City itself operates. “It is entirely legal and promoted in Seoul as an example of the sharing economy,” the company stated.
“Uber is a technology company that provides a software application service to rider and driver partners who want to partake in ride-sharing. The company’s smartphone application, combined with this type of sharing of resources, makes the city’s movement flow better,” the company stated.
It also stressed that at this stage there are no fares involved as this is a test, and it is legal in Seoul to hail a ride through the app.
The UberX service has been launched in 90 countries. Uber is active in 175 countries, with Korea being the third Asian nation after Singapore and Taiwan.
“Since it is a new service, we have always faced opposition from the government and other organizations. But consumers overwhelmingly support this type of service,” said a company official.
“Seoul City, in promoting its own ride-sharing service, clearly recognizes the value in providing more convenient, efficient and transparent transportation options for citizens. There is great benefit in the model of carpooling. Permitting riders to share the cost of rides with drivers, and reimburse them for their work, is cheaper for the customer, easier to get around the city and conserves gas. We firmly believe this ultimately benefits the city and helps relieve congestion and pollution.”