March 6, 2015 / 5:48 AM / 4 years ago

Uber halts low-cost ride service in Seoul, seeks to avoid ban

SEOUL (Reuters) - Online taxi service provider Uber Technologies Inc said on Friday it would suspend its low-cost uberX ride service in South Korea, in another concession by the U.S.-based firm trying to avoid a total ban in Asia’s fourth-largest economy.

The logo of car-sharing service app Uber on a smartphone over a reserved lane for taxis in a street is seen in this photo illustration taken in Madrid on December 10, 2014. REUTERS/Sergio Perez

Uber said the decision to suspend the service in Seoul, effective Friday, was part of its efforts to bring its business in line with local regulations.

The service matches customers with private drivers without a commercial license, a practice South Korean regulators say is illegal and which has also angered the taxi industry.

“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,” Uber said in a statement.

An official at the city of Seoul said the authorities would review Uber’s decision in detail before deciding on a response.

Uber has come under scrutiny in South Korea and other countries across the globe for alleged violations including using unlicensed drivers.

South Korea’s transport ministry has vowed to shut down Uber and the city of Seoul is offering rewards of up to 1 million won ($910) for people who report private or rented car drivers offering transport through Uber.

Uber chief executive Travis Kalanick and the company’s South Korean unit have been indicted by local prosecutors for violating a local law prohibiting individuals or firms without proper commercial licenses from providing or facilitating transportation services.

Japan’s transport ministry has also banned Uber’s pilot ride-sharing service in Fukuoka, adding to the a growing list of regulatory problems.

($1 = 1,098.6300 won)

Reporting by Se Young Lee; Editing by Miral Fahmy

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