Uber Revives South Korea Push With Help From SK Telecom’s TMAP
(Bloomberg) -- Eight years after its first attempt to break into South Korea, Uber Technologies Inc. has a new plan to shake up the country’s $8 billion taxi market and dethrone local giant Kakao Corp. in online mobility.
This time, the San Francisco-based tech giant has enlisted Korean conglomerate SK Telecom Co.’s unit TMAP Mobility to join its cause. Their first joint venture UT will launch a ride-hailing service on Nov. 1 and it’s targeting around 10,000 franchise taxis by the end of this year.
The company also aims to expand into carpooling early next year, once a new bill that allows taxi providers to offer the service takes effect in late January. Taxi pooling, which had been banned in Korea for years, could spark a heated competition in the nation’s ride-hailing market, currently dominated by Kakao’s mobility business, and revive a stagnant taxi industry.
“The regulatory landscape is in the process of evolving,” UT Chief Executive Officer Tom White said in an interview. The pooling service will probably start at a small scale but will be “a game changer” for the industry, he added.
The new venture, 51% owned by Uber with TMAP Mobility holding the remainder, marks a comeback for the U.S. company, which had been the target of large-scale protests by taxi drivers when it first started offering services in Korea in 2013.
In 2017, a Seoul court fined the company’s local unit 10 million won (about $9,000) for running an illegal taxi rental business, after years of legal pressure from the government. Uber had also terminated its food delivery offering after failing to overcome the dominance of local operator Woowa Brothers Corp.
Uber is launching UT in the face of intensifying competition. South Korea’s market for mobility services is seeing renewed interest from tech and auto companies as well as startups specializing in services such as taxis for pets. Fintech unicorn Viva Republica, which operates the online payment service provider Toss, bought one of the major local mobility startups Tada and plans to offer a new service, the company said earlier this month.
The addition of carpooling, along with several other amendments to passenger transportation service laws, could overhaul South Korea’s taxi industry, which has more than 250,000 licensed drivers and reported 8.7 trillion won in sales in 2019, according to a report by Mirae Asset Securities. Unlike in the U.S., all of Uber’s drivers in Korea will hold taxi licenses.
For SK’s TMAP Mobility, UT is part of its vision to become a provider of all-in-one mobility services. The Korean company, which has the largest navigation platform with 13 million monthly active users, is also developing a map for autonomous driving and service for flying cars, said Lee Jae Hwan, TMAP’s head of mobility strategy group. The company will continue to add new services such as electric scooters and offer specialized subscription models, Lee added.
TMAP Mobility expects to reach more than 600 billion won in sales by 2025, the year it’s targeting to go public at a 4.5 trillion won valuation.
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