Is Korea once again employing protectionist policies rather than embracing the opportunity presented by progress?
Seoul is proud of being labelled one of the the most progressive tech-focused cities in the world. The capital has one of the highest smartphone penetration rates in the world. Its residents are well-known for their rapid tech adoption. Additionally it’s administration has been pushing a move towards innovation and tech development.
However, Uber will likely be banned in Seoul to maintain the status quo, to protect licensed taxi drivers, to allegedly to protect consumers, and also to allow Seoul City Administrators to role out their own taxi app later this year, in a competition-free environment.
Seoul was the first Asian city that Uber entered around a year ago, and the service has been steadily growing in a taxi-heavy domestic market. Seoul has four times as many cabs as New York City and rides are very cheap, starting at a minimum fee of only around $3.00. But Seoul taxi drivers have a spotty reputation. At peak times Seoul taxi drivers are well-known for refusing to take rides that aren’t long enough to be worth their time. In adverse weather Seoul taxis can become all but impossible to hail. And customer service is also often lacking, with drivers frequently failing to show courtesy to their customers or complaining for personalised requests like multiple drop-offs. It’s not uncommon to hear drivers swearing under their breath for being asked to fulfil very reasonable passenger requests. Suffice to say that while Seoul taxis are cheap, there is much lacking on the customer service end. For the discerning taxi customer Uber has been offering a fantastic high-end alternative service, and has been fulfilling a market need.
The current move for a ban by Seoul follows other initiatives to restrict Uber in the city of over 25 million inhabitants. Earlier in 2014, a fine of nearly $1,000 was levied by Seoul on a driver who got customers through Uber. The city government has also asked for a police investigation of the company, although that has been suspended because of a lack of evidence. At that time local Managing Director, Chan Park, was not deemed to be responsible for Uber’s business, and CEO Travis Kalanick was not in the country and available for prosecution.
While Seoul City’s claims have validation on some grounds it seems counter-productive for the city, which is determined to encourage innovation. Considering a complete ban, without the possibility for discussion, does not send out signals of openness to new ways. Added to this is the fact that the administration also intends to create its own Uber-copy. This is a very worrying sign for other companies that may be viewing Korea as the regional test market for new tech products and services.
Korea has much promise as a regional tech hub in Asia, but the negative global PR that stories like this generate will serve to demonstrate that Seoul may still be stuck in the past, a past that favours protectionism over innovation.