Uber ignores possible government crackdown, test launches UberX in Korean capital

Uber announced today it will launch a pilot run of UberX, its low-cost alternative to the flagship UberBlack, in Seoul. Starting today, drivers looking to ferry passengers around the city can sign up to participate in the test phase, provided they’re over the age of 25, pass a background check, and are “properly licensed with auto insurance.”

It’s not 100 percent clear if this UberX tier in Seoul resembles the San Francisco version of UberX, in which ordinary people can pick up passengers in their own vehicles for cash, or if it resembles UberX in New York City and Singapore, in which black car chauffeurs with commercial livery licenses ditch their Mercedes for Camrys and go about business as usual. However, judging by the post on Uber’s official blog, it’s the former. For one thing, Uber didn’t publicly solicit applications prior to its UberX launches in Taipei and Singapore. In addition, the company notes how drivers can “contribute to their community” and uses the phrase “ridesharing” to describe the service. (Update: Uber got back to Tech in Asia and yup, it’s ridesharing).

For now, Seoul passengers who hitch a ride using UberX can do so completely for free. It’s not clear if Uber will pay the drivers to participate in the pilot, but given Uber’s aggressive tactics when it comes to recruiting, it doesn’t seem out of the question. We’ve reached out to Uber for clarification on this matter. (Update: Uber’s Asia spokeswoman tells Tech in Asia “Uber is reimbursing the driver partner’s cost for their efforts in helping us with the experiment).

See: 5 challenges Uber will face as it expands in Asia

UberX’s pilot launch in Seoul comes about a month after the Seoul Metropolitan Government called for a ban on the app. In its public response, Uber described a rival app proposed by the Seoul government as a “waste of taxpayers’ money.” Since then, the government has yet to implement any form of crackdown on Uber to our knowledge.

Given that peer-to-peer UberX occupies far more precarious regulatory territory than NYC’s UberX, the pilot test is indeed a bold move. But by now, bold for Uber is nothing new. Moreover, increasing the driver supply is the driving mechanism behind its health, since more drivers means shorter wait times, and shorter wait times ensures consumer demand stays robust. Partnering with taxis, as it’s done in Hong Kong, is one way to do that; launching a ridesharing tier is another.  It seems the US company views growth and expansion as its best defense against hostile organizations and regulation, and counts on support from users once pressure to shut down mounts.

Editing by Steven Millward; top image via Flickr user tylerdurden