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Uber CEO charged in South Korea, could face jail time

Asia has been important to Uber's growth, but the company has been seeing major pushback lately

Financial trends and news by Steven Loeb
December 24, 2014
Short URL: http://vator.tv/n/3b0c

Uber has had a rough time lately, there's no getting around that. Despite raising another $1.2 billion, thecompany has been in the news for all the wrong reasons. 

Many of those mistakes have been self-inflicted, so it can be hard to feel bad for Uber sometimes. In otherinstances, when the company is challenged by existing regulations and laws, it serves as a remind that,despite it's problems, Uber is ultimately making a big difference. Nobody fights this hard againstsomething that is not important.

The company has found its latest legal snafu in Seoul, South Korea, where the company seems to befacing its most serious legal challenge yet.

Prosecutors have indicted Travis Kalanick, the founder and CEO of Uber, along with the head of MKKorea, a local rental-car service operator, identified only as Lee, according to a report from YonhapNews on Wednesday.

The charges against them involve a law that bans rental-car service operations from conducting passenger-transport business using their cars. These are not frivolous charges either; according to thereport, Kalanick and Lee could face up to two years in jail if they are found guilty, or have to pay 20 millionwon, the equivalent of $18,121. Guess which one of those Kalanick would choose. 

Uber has operated in Seoul since August of 2013, but has run into regulatory trouble ever since (becausethis is Uber and so of course it has). The current investigation began last year when the SeoulMetropolitan Government filed a complaint against the company, leading to the ongoing investigation thatled to these charges.

Kalanick did come to the Seoul Gangnam Police Station for questioning on Wednesday, but did notrespond to the summons of the prosecution.

Things have been escalating between Uber and the city of Seoul recently; last week the city council actually passed a new ordinance that said that it would pay people for snitching on Uber. The reward is up to 1 million won, or $910.50.

"Uber Technologies respects the Korean legal system and will provide its full cooperation. We firmly believe that our service, which connects drivers and riders via an application, is not onlylegal in Korea, but that it is being welcomed and supported by consumers," an Uber spokesperson told VatorNews. "At the same time, Uber does not believe it is appropriate for authorities to seek to punish drivers who are trying to make a living through this service. We are confident that the Korean court will uphold a fair and sensible judgement on this case." 

Uber in Asia

Asia has been key to Uber's growth in recent years. In 2013, along with South Korea, it expanded to SingaporeTaipeiDubaiShanghai and Bangalore. In April of this year came the big one: the company began rolling out its services in Beijing.

It has put a particular focus on India, which earlier this year became Uber's largest global market outside of the United States. 

But things have been teetering in the region recently. An incident in New Delhi earlier this month, where a driver allegedly raped a passenger, causing the service to be banned in that city, as well as Hyderabad. The incident led to Uber declaring new safety features and stricter background checks.

On top of that Uber’s services were declared illegal in Taiwan last week.

(Image source: uber.com)


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