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Uber taxi founder indicted for illegal business in S. Korea

All Headlines 10:50 December 24, 2014

SEOUL, Dec. 24 (Yonhap) -- South Korean prosecutors said Wednesday they have indicted the founder of the U.S.-based taxi service Uber on charges of operating an illegal taxi service here.

The Seoul Central District Prosecutors' Office said it prosecuted Travis Kalanick, the founder and CEO of the app-based taxi service, and the head of MK Korea, a local rental-car service operator, identified only as Lee, both without physical detention.

The two were charged with violating a law governing passenger transport services, according to prosecutors. Under the law, rental-car service operators are banned from conducting passenger-transport business using their cars. Violators face up to two years in jail.

The authorities have stepped up their investigation into the new taxi service in response to anger from local taxi drivers who said their income had been hit unfairly by the app.

Uber links up drivers and passengers through a mobile phone application. Founded in 2009, the service quickly spread to 250 cities in 50 countries, according to the operator, Uber Technology.

However, it now is battling lawsuits for unfair competition and rising anger from taxi companies over its use of drivers who they say are not properly registered and failure to comply with fare regulations.

Last year, Seoul Metropolitan Government filed a complaint against Uber Technology, leading to the ongoing investigation. Kalanick showed up at Seoul Gangnam Police Station for questioning but did not respond to the summons of the prosecution.

On Friday, the city council of Seoul passed an ordinance that would offer a financial reward of up to 1 million won (US$910.5) for those who report Uber's illegal activities, among other things.

Uber has, however, vowed to continue its business despite the new ordinance.

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