SEOUL (Reuters) – South Korean prosecutors have indicted the local subsidiary of U.S. taxi-hailing service provider Uber and Uber CEO Travis Kalanick for violating a law governing public transport, Yonhap News Agency and Bloomberg have reported.
The Seoul Central District Prosecutors’ Office issued the indictment for violating a law prohibiting individuals or firms without appropriate licences from providing or facilitating transportation services, Yonhap reported, citing an unnamed prosecution official.
Prosecutors will not make any arrests as part of the indictment, Yonhap said. The penalty for breaking the law in question is a maximum fine of 20 million won ($18,121) or a prison sentence of up to two years, the news agency reported.
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.
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 drivers. According to Bloomberg, Uber’s South Korea unit and MK Korea operated rental cars illegally as taxis.
The prosecutors’ office declined to comment on the Yonhap report. An Uber spokeswoman was checking the veracity of the report and said Uber services were functioning as normal.
($1 = 1,103.7000 won)