Uber CEO faces two years in prison for operating illegal taxi service.
South Korean prosecutors have indicted the founder of Uber, Travis Kalanick, for operating an illegal taxi service in the country. The formal accusation against Kalanick and another man, a local rental car service operator, was made without physical detention. Violators of the Korean law in question, which stops rental car services from offering paid passenger transport, could face a fine of up to 20 million won ($18,121), or up to two years in jail.
SEOUL CITIZENS CAN EARN BOUNTIES FOR REPORTING ON UBER PRACTICES
Uber officially launched in the South Korean capital city of Seoul in August 2013, after a test phase that began in June, but only started trialling its UberX service — which pays private drivers for using their own car as a taxi — in August this year. The ride-sharing service faced anger from local taxi drivers, upset that amateur drivers were undercutting their fares. Where Uber doesn't require that its UberX drivers have any special licenses, private Seoul taxi drivers can reportedly expect to pay around 70 million won ($63,477) for the proper documentation.
The service also faced staunch opposition from local authorities: Korea's Ministry of Land, Infrastructure and Transport declared that the ride-sharing app was illegal before it officially launched, and other branches of the administration made it clear that Uber would not be welcome in the country. "As soon as testing phases are over," a spokesperson for the Seoul city government said in September, "our dedicated squad will begin clamping down on Uber drivers." The city has made good on the threat, passing an ordinance last week that offers a 1 million won ($910) reward for anyone who reports on Uber's activities. For the moment, an Uber spokesperson said the service was operating as normal in the city.
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Uber Faces Class-Action Lawsuit Over $1 'Safe Rides Fee'
Two Uber riders filed a class-action lawsuit against the car-service app company this week, claiming they should not have had to pay the $1 “Safe Rides Fee” Uber tacks on to each ride because the company’s background checks were misleadingly represented as “industry leading.”
The lawsuit, filed Tuesday in federal court in San Francisco, is the third in the last month filed on behalf of Uber’s passengers. An Uber customer filed a class-action lawsuit on Dec. 3 over a $4 fee charged to passengers going to San Francisco International Airport to reimburse drivers. The lawsuit says the company pocketed the fee. A similar lawsuit filed in late November claims riders were overcharged for a fee at Boston’s Logan International Airport.
“We don’t expect to get 100 cents on the dollar — that would be shooting the moon,” said Nicholas Coulson, one of the attorneys filing the lawsuit. “But we do aim to get the greatest possible restitution.”
Uber added the $1 Safe Rides Fee in April to help pay for its safety program — driver training, background checks and vehicle inspections. Until recently, Uber told riders its background checks are “industry leading” and “often more rigorous than what it takes to become a taxi driver,” but the complaint says those promises are false and misleading because drivers do not have to be fingerprinted.
If that argument sounds familiar, it’s because the district attorneys of San Francisco and Los Angeles made the same point when they sued Uber earlier this month. To become an Uber driver, you only have to submit your name and identification to background checks. You don’t have to prove that the identity is actually yours, which would be done through fingerprinting or other biometric identification. Someone with a criminal record could, in theory, become an Uber driver using the identity of a sibling or a friend with a clean history.
“At the end of the day, you cannot conduct the most comprehensive background check possible if the information you have obtained has nothing to do with the person that is signing on with you to be a driver,” San Francisco District Attorney George Gascon said when that lawsuit was filed. “It is completely worthless.”Coulson said the class-action lawsuit is focused more on getting restitution for riders, while the district attorneys’ lawsuit prioritizes making Uber change its safety marketing language.
When prosecutors sued Uber, they also announced a settlement with Lyft, a rival car-service app, over similar language about their background checks. Lyft, like Uber, charges a $1 fee — the company calls it a “Trust and Safety Fee” — and does not require fingerprinting for drivers. When Lyft settled with prosecutors, it agreed to change its language about its background checks. Coulson said that he and other attorneys have not ruled out filing a similar lawsuit against Lyft for its safety fee.
It’s unclear whether class-action lawsuits like this one will go the distance. An Uber driverlawsuitis continuing along the legal process, but a similar one filed on behalf of Lyft driversstalledin August. Uber’s terms of service for riders include an arbitration clause that could prevent riders from taking the company to court. But a judge in the Uber driver lawsuitruled in June to allow drivers to opt out of their mandatory arbitration clause.
An Uber spokeswoman was not able to give an immediate comment about the lawsuit. The complaint can be found >here.<