SEOUL (Reuters) - South Korea has indicted the chief executive officer and local subsidiary of Uber Technologies Inc for violating a law governing public transport, becoming the latest jurisdiction to challenge the U.S. taxi service provider.
The Seoul Central District Prosecutors’ Office issued the indictment against CEO Travis Kalanick and the firm’s Korean unit for violating a law prohibiting individuals or firms without appropriate licenses from providing or facilitating transportation services, an Uber spokeswoman said.
The prosecutors’ office declined to comment.
“Uber Technologies respects the Korean legal system and will provide its full cooperation,” the company said in a statement without detailing the charges brought against it.
Uber, through its apps, charges fees to play matchmaker for passengers and drivers - some registered as taxi drivers. But a lack of regulation for the relatively new business model has brought Uber to the attention of authorities worldwide.
Taiwan and the Chinese mainland city of Chongqing on Monday separately said they were investigating Uber over concerns it and its drivers were not appropriately licensed.
Last week, Seoul’s city legislature passed a measure to fine Uber drivers not registered as taxi drivers, and offer financial reward for those reporting such individuals.
The decision came after the city government repeatedly said Uber was engaged in illegal business activities, an accusation the company denied.
“We firmly believe that our service, which connects drivers and riders via an application, is not only legal in Korea, but that it is being welcomed and supported by consumers,” Uber said in its statement on Wednesday.
Prosecutors will not make any arrests under the indictment, South Korea’s Yonhap News Agency reported earlier on Wednesday. The penalty for breaking the law in question is a prison sentence of up to two years or a maximum fine of 20 million won ($18,121).
Uber’s spokeswoman said Uber services are functioning as normal.
($1 = 1,103.7000 won)
Reporting by Se Young Lee; Editing by Christopher Cushing