Uber Technologies Inc. Chief Executive Officer Travis Kalanick was indicted in South Korea and China’s largest municipality pledged to crack down on its service in the latest instances of government scrutiny of the company.
Kalanick, Uber’s Korean unit and car-rental partner MK Korea were charged yesterday by the Seoul Central District Prosecutors’ Office for flouting a local transportation law prohibiting rental cars from operating as cabs, according to an official at the department, who asked not to be named citing internal policy. The official declined to comment on whether prosecutors expect Kalanick to appear for questioning.
Uber will cooperate fully and is confident the courts in South Korea will uphold a “fair and sensible judgment,” it said through public relations representative Insight Communications. The maximum penalty for the alleged legal violation is a two-year prison sentence or a fine of as much as 20 million won ($18,000), Yonhap News reported today.
The San Francisco-based company became the most highly valued U.S. technology startup after a fundraising round this month valued it at $40 billion. Uber is coming under increased scrutiny worldwide as governments step up regulation of its car-sharing service, which licensed taxi operators call unfair competition.
Travis Kalanick, Chief Executive Officer of Uber Technologies Inc.
In China, the southwestern city of Chongqing will “strike harder” at those who operate illegal transportation services using car-booking software such as Uber, according to a statement posted on the website of the transportation commission.
The declaration follows a report by the official China News Service last week that law enforcement officials had raided a site used by the company to train new drivers. Uber is “actively communicating and seeking clarification” from the municipal government, it said in an e-mailed statement.
Uber’s screening practice was criticized after allegations that one of its drivers raped a woman in New Delhi, while Vietnam and Taiwan have declared its services to be illegal.
The company said in August it had sought a legal opinion and that its Seoul service obeys the law. Paid transportation with unregistered vehicles is “clearly illegal activity,” South Korea’s Ministry of Land, Infrastructure and Transport said later that month.