Taxi-disruptor Uber has earned the ire of incumbents around the world by starting up its uberX service without regard for local laws, but the company has now backed down in South Korea and suspended the service while it tries to reach a detente with local cabbies.
In a blog post released last Thursday, the company said “Effective today, we are suspending uberX, our ridesharing platform, and operate UberBLACK as prescribed by current law. This decision was made as part of a proposal to the Taxi Industry.”
The company says the decision was made because “it was in the best interests of Korean riders, drivers and the community as a whole to further define our business offerings within the current confines of the regulatory framework, without ambiguity.”
Closing a service to seek clarity and seeking to comply with local regulations are fascinating precedents for Uber as in other nations it has argued it should be allowed to enter the market on its own terms, rather than making accommodations with incumbents.
Don't think the company's going soft: Uber's proposal to the South Korean taxi industry is to “provide all Seoul Taxis with free access to Uber platform.” Doing so “will help create innovation and enhancement to their services in Seoul, the company argues, going on to say “We believe that the use of the Uber application by taxis will benefit both the taxi driver, the taxi companies and consumers.”
“We stay committed to cooperate to reach a compromise with the City and Taxi Industry, and look forward to working together to bring regulated options to Seoul,” the post concludes.
Whether Seoul wants Uber's solution is yet to be revealed, but the offer to make Uber's platform available to local cabbies looks loaded. It's eminently foreseeable that Uber is positioning itself as the de facto standard for taxi-and-ride-finding apps, to the likely detriment of existing offerings, rivals like Lyft and those considering an entry to the market. Uber may look like it's being generous and extending a hand to Seoul's cabbies and regulators. What's in its the other hand? ®