Amidst mounting government pressures, Uber makes low-cost UberX free of charge in Seoul

Facing mounting pressures from the Seoul government, Uber will make all rides on its low-cost UberX tier available free of charge in South Korea’s capital, reports Reuters.

“We want to actively work towards a consensus, and the first step to that process is switching off the fare. We hope the City accepts Uber’s decision as indication of our sincere desire to offer our technology to the citizens of Seoul,” said Allen Penn, head of North Asia operations, in a prepared statement.

Uber tells Tech in Asia that the company will compensate its drivers who provide the free rides for customers.

Seoul has taken an especially aggressive stance towards Uber, which has rolled out a peer-to-peer ridesharing tier along with its standard chauffeur services in the city. Following the city’s initial calls for a ban on Uber, it later began offering bounties of up to KRW 1 million (about US$910) to people who reported Uber drivers to authorities. Uber CEO Travis Kalanick, meanwhile, was indicted by municipal prosecutors for allegedly violating a law that prevents rental car vehicles from providing passenger transport services. The founder could face up to two years in prison if found guilty.

Earlier this month, Uber proposed a new regulatory framework that would grant its drivers commercial licenses, which was met with silence from authorities.

Making ridesharing services free could potentially help Uber dodge regulatory bullets in risky markets, not to mention win the good grace of is supporters. In China, for example, Uber calls its ridesharing tier People’s Uber, and claims to charge consumers only for the cost of the ride under a self-described non-profit model.

Editing by Paul Bischoff, top image by ekodimus