Why do taxi companies attack Uber?

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As Techrux reported that Uber is now actually stopping its service in Seoul, you may have a question on why this service is stopping. The Chosun Ilbo reported an article on the premiums of the taxi license in the industry. This is the most of the reason how this service suspension has been made.

The number of Taxi license, especially for a private taxi, is now limited in Seoul Metropolitan area. Therefore, someone who has working experience of a corporate taxi companies buys the license with premium. If you are operating corporate taxi, the drive has to deposit $150 to the taxi company. Usually Taxi driver earns around $200 a day.

Most of the Koreans recognize the Taxi driver, especially for corporate taxi, as a 3D workplace. Therefore the taxi license for private taxi is getting higher. You need to pay $ 66,000 to $ 100,000 to buy the license at a premium.

If Uber becomes legal service, you don’t need to pay for premium to obtain a licence. What you need to do is that sending the required document to be a driver in Uber and get 1 hour education from Uber. If the demand drops, the premium price shall go down.

Every stakeholder in the taxi industry, license dealer-license buyer-government sector, recognize the premium. However, buying something with premium is not under the regulation or official legal sentences. Even the premium drops the government cannot pay for its loss as a subsidy. That is why public sector does not like over and trying to block the service and designating as an illegal one.

That is why Uber is being attacked from Taxi Companies everywhere. Not just because it is getting the pies of the legacy taxi drivers, it is lowering down the premium price of the taxi license and the whole industry itself. For instance, Uber has been sued in federal court by 45 Philadelphia taxi companies. Led by lead plaintiff Checker Cab Philadelphia Inc., the cab companies claim Uber is attempting to operate a taxi service without receiving legal authority to do so.

The main reason for this sue was the loss of the license premium. It went down to $ 880,000,000 compared with the time when Uber was first launched in the city.

Of course, still Uber is now providing its service in Philadelphia. But you should look how it became and obtained the resistance from the industry. Or, this might be a way of marketing from Uber Korea and the APAC, but a strong one.

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