Uber Debuts Taxi App in South Korea, but Is It Legal?

Plagued by regulatory concerns

Taxi app company Uber continues to make inroads in Asian markets, signing up independent cab drivers in Seoul, South Korea, despite regulatory pushback from the country's transport ministry and local authorities.

The Wall Street Journal reports that Uber is paying its contract cabbies in Seoul a subsidy of $1.90 every time someone books a ride using its UberTAXI ride-booking app, which rolled out in Tokyo in August. The app, which is separate from the flagship Uber app, dispatches a driver to the user's location.

Seoul's local government says the Uber service is illegal, but Uber claims it is complying with all local regulations. Regulators in South Korea's capital have already cracked down on the company's UberX service, which connects regular drivers and passengers, and have banned its UberBLACK limo service.

In an apparent effort to drive Uber out of Seoul, the city is reportedly going to launch its own taxi hailing app for registered cabs.

The California-based company claims licensed cabbies who signed up for its app in Singapore, Tokyo and Hong Kong have increased their business by up to 40 percent. Uber says its long-range plan is to sign up Seoul's licensed drivers as well as freelancers.

The taxi-ride-sharing company, which is backed by Google, is valued at $17 billion and is fighting regulatory pressures and bans from established cab companies and governments worldwide.

Despite its growing pains, Uber and its main rival Lyft, continue to build market share. In fact, London-based taxi app company Hailo pulled out of the U.S. this month saying it couldn't compete with other services.