Uber and TMAP Mobility’s joint venture, UT, has ended the pilot of its premium service, Black. Launched in early December 2023, black service was designed to offer luxury sedans with professional chauffeurs to foreigners visiting South Korea and corporate clients seeking high-end transportation.
Despite the service’s appeal, with over half of its clientele being international visitors and corporate transactions constituting approximately 70% of its usage, the taxi industry expressed concerns. The industry argued that the service’s availability to the general public undermined its exclusivity, leading to the pilot’s discontinuation in late January.
The mobility sector still feels the lingering effect of the revised bill, the Tada Prohibition Act, which effectively pushed a major ride-hailing service out of the market and led to a classification of various platform-based transport services to outline regulatory boundaries. This strategy aimed to mitigate pushback from the taxi industry and foster the growth of services that could succeed Tada. ‘Type 1′ services emerged from this context, operating without a taxi license, similar to Tada and Uber, but with a mandate to contribute 5% of their revenue to a taxi fund and limitations on fleet expansion. This category represents a compromise between the taxi industry and digital platforms. UT’s black service was also a product of this initiative, in partnership with LANE4company, a Type 1 licensed operator.
Ironically, the Type 1 category, conceived as a solution to the Tada dilemma, now faces challenges for purportedly undermining the taxi industry. With fewer than ten vehicles in the UT black fleet and only 520 Type 1 vehicles industry-wide, they scarcely pose a significant threat to traditional taxis. Moreover, with its fares significantly higher than regular taxis, the black service does not directly compete with them. Nevertheless, the taxi sector has reportedly pressured the Ministry of Land, Infrastructure and Transport, and UT to halt the black service, even resorting to measures like setting up a hotline to voice their demands.
Kwon Oh Sang, CEO of LANE4company, said, “It’s disconcerting that a venture initiated by the government faces such uncompromising opposition.” This sentiment is echoed in the recent withdrawal of a similar service by Kakao Mobility following industry objections.
