Seoul City to Launch Premium Taxi Service to Take on Uber

The Seoul city government said on Thursday that it planned to launch a premium taxi service in August to rival online ride-service provider Uber, adding to the challenges to the U.S. company's expansion plans in Asia's fourth-biggest economy.

The move comes after the country's transport ministry last week spurned Uber's proposal for a new driver registration, and reiterated its pledge to ban Uber, which connects passengers to private cars on their smartphones.

Uber, a tech-industry darling worth at least $41 billion (roughly Rs. 2,56,060 crores), is battling bans in South Korea, India, France and Spain for alleged violations including using unlicensed drivers.

To begin with, the Seoul Metropolitan Government will introduce the taxi-hailing service with 100 luxury and mid-sized sedans each.

"We will provide a premium tax service which excels that of Uber..." Seoul city said in its presentation material to reporters.

Seoul city will partner with taxi assocation to launch the pilot service, the statement said, but did not elaborate.

The city will also promote services that connect users with registered taxis via smartphone applications. Those services will be launched by local companies like SK Telecom and KakaoTalk next month.

In January, Seoul city started offering rewards of up to 1 million KRW ($929) for people who reported private or rented car drivers providing transport through Uber.

In December, South Korean prosecutors indicted Uber CEO Travis Kalanick and the company's South Korean unit for violating transport rules which require drivers and vehicles used in taxi services to be licensed.

© Thomson Reuters 2015