By Lee Kyung-min
Police booked key executives of Uber Korea and owners of rental car companies Tuesday for violating the Transport Law.
They include the firm’s 32-year-old head, surnamed Kang, and an executive identified as Lee, 27. They may face charges of making illegal gains through contracts with the rental car firms that used Uber’s unauthorized location tracking app to attract riders, police said.
Twenty-seven people from six rental car companies were also booked.
Police said they plan to summon Uber CEO Travis Kalanick from the United States. He was indicted here in December on charges of running an illegal taxi business, but has refused to show up for questioning.
Police said Uber enabled drivers of rental cars to find riders through the location tracking app without obtaining permission from the authorities.
“Uber charged 20 percent commission for every transaction made,” a police officer said.
Currently, rental car service companies are banned from offering taxi services. Violators can face imprisonment for up to two years or a fine of 20 million won ($18,000).
Police said Uber’s illegal business has disrupted taxi services here since August.
According to one of the six rental-car service companies, their three-month business with Uber resulted in 96 million won ($85,000) in profit.
However, the exact amount of profit in total is unknown because the company’s U.S.-based bank account is not subject to government tracking, police said.
They said Uber helped several local rental car service companies start business by providing them with “start-up funds,” holding training sessions, and providing specific instructions on use of the app.
Police said Uber will face additional charges of violating Global Positioning System (GPS) use.
Any business making profit here from GPS location use must obtain permission from the Korea Communications Commission (KCC) prior to such business.
Police said the passenger safety is greatly compromised too, because the rental-car drivers, unlike taxi drivers, are not properly trained.
Also, unlike taxis, rental cars are not insured, and would fail to guarantee due compensation in the case of an accident.
Since Uber’s “illegal” business last year, local authorities including the Seoul Metropolitan Government (SMG) stepped up their effort following a spike in complaints by local taxi drivers who feared they would lose their jobs to the new service.