Last December, the city of Seoul offered rewards of 1 million won (about US$910) to people who report Uber drivers, and called all services by Uber "blatantly illegal." In the last three months of operating the service for sale, about 100 reports have been made although no rewards were provided by the city yet, according to Uber Korea's spokeswoman. Seoul city was not available for immediate response.
South Korean law prohibits unregistered drivers from soliciting passengers using private or rented vehicles. Penalties include up to two years in prison or fines of up to 20 million won.
In Korea, Uber offers two services accessible through mobile phone apps: the ride-hailing service Uber Black, operated by professional drivers, and the ride-sharing service uberX, which allows anyone with a driver's license to offer a ride in a privately owned car.
UberX usually costs an initial 2,500 won, plus 630 won per kilometer or 100 won per minute, but now the company is offering free rides, while still paying drivers. The company has previously made the service free for limited periods in other locations, including Perth, Australia, and the U.S. cities of Boston and Chicago.
Some Korean users, though, were skeptical of the safety of the now free service.
"I've met some strange taxi drivers before, I'm not sure how safe Uber drivers would be, especially when they're not officially licensed taxi drivers," said Jiho Yim, a woman freelance programmer in Seoul. "I would want to try it out when I get some positive feedback from a friend or in the media, but so far I have not heard any."
Other cab users tout the convenience of the mobile app.
"There are already many cab-calling services in the city, but they're often not available in certain areas or at certain time, that's when Uber comes in handy," said Woo Young-jei, a Seoul-based entrepreneur. "But the safety issue is still concerning. If I were a woman, I doubt that I would use Uber."
Recently, Uber services were suspended in Delhi after a female passenger was allegedly raped by a Uber driver.
The San Francisco-based company defended its service as "safe, affordable and efficient transport solution," and added that ride sharing is still a new concept for which there is no established regulatory system in many countries.
"We hope the City accepts Uber's decision as indication of our sincere desire to offer our technology to the citizens of Seoul," said Allen Penn, the head of Uber's North Asian operations, in a statement.
In December, South Korea filed a criminal charge against Travis Kalanick, CEO of the San Francisco-based startup, for allegedly flouting local transportation laws. Despite the government backlash, Uber operates in 290 cities around the world, and it raised $1.4 billion in investments last year, valuing it at $40 billion.