From the very start of this year, Uber has been consumed in internal workplace issues, significant legal nuances, and setbacks to its widely popular ride-hailing platform. The latest legal setback to the company comes from South Korea, where its local unit has now accepted its illegal code of conduct. It has been fined 10 million won (around $8,840) for running an illegal taxi business.
As part of its global expansion drive, Uber stepped foot into the fourth largest Asian country by signing an agreement with local car-rental company MK Korea earlier in 2013. The latter agreed to pay 20 percent of the total sales figure as Uber’s fee charges. The cab aggregator started ferrying people around the city but was soon caught under the radar of the government authorities.
In 2014, it was discovered that Uber Technologies’ local ride-hailing unit was operating in violation of Korea’s Passenger Transport Service Act. It had been offering rides to individuals in partnership with MK Korea, which meant providing transportation services without appropriate licenses. This has been prohibited under Korea’s transport laws, thus Uber’s local unit and CEO Travis Kalanick were indicted for operating an illegal cab service in the country. MK Korea was fined 2 million won (around $2,000) for providing vehicles to the ride-hailing giant.
The Seoul Central District Court said in an official ruling that Uber’s local Korean unit has admitted to the illegal acts committed by them. The ride-hailing giant repents its decision of hiring private drivers without taking into account if they have a commercial taxi license or not. The issue has been completely resolved and the company is now operating legitimately after dropping UberX service from the platform. Its current operations are not expected to be impacted by this ruling.
Talking about the court’s decision, Uber in a statement said:
Uber respects the court’s decision and we are looking forward to strengthening our partnership with the government and serving riders, drivers, and cities in Korea.
In addition, the court has currently postponed the hearing of Uber’s chief executive Travis Kalanick as he did not appear at the trial. He has been declining to answer the summons being presented by the Korean court and it doesn’t affect the company’s operations. The local authorities also have no effective method of forcing the multi-billionaire to come down to Korea and stand the trial.
In the Korean region, the ride-hailing giant was struck with legal consequences because of its original business model. For those of you aware of the same, Uber enables users to ferry a ride with both licensed taxis and unlicensed cars and drivers. The said model is also known to have faced with regulatory and legal troubles in several other nations, including India.
As for the current status of Uber, it is bogged down by trouble from all directions.
