Uber Korea said that it shut down its low-cost ride-sharing service on Friday amid controversy over the legality of its business.

“Uber Korea has decided to terminate the operations of UberX to negotiate with the Seoul city government,” the company said in an email to drivers Friday afternoon.


The company said that it was “a very difficult decision” as they have been trying to expand UberX operations in South Korea since the service was launched in August 2014.

The decision comes days before the National Assembly is set to discuss related issues on Tuesday.

Last week, the operator began offering free rides in order to avoid further conflict while continuing operations.

“We drivers are quite surprised about the news. There was no prior notice about the shut down and they sent the email three hours before ending the service,” said Kang Jin-ho, an UberX driver in Seoul.

In Korea, Uber provides three types of ride-sharing services that allow users to connect with drivers in minutes through smartphone-based application: Uber Taxi, which allows users to request and pay for a taxi; UberX, which allows users to book private cars; and Uber Black, a premium service where you can book more luxury cars.

However, the services have for long faced regulatory hurdles and resistance from local taxi operators.

Last month, the Transport Ministry vowed a crackdown on its ride-hailing services, claiming using privately owned or rented cars to carry passengers for a fee -- which is what Uber drivers are doing using smartphone-based applications -- is clearly illegal.

Against such resistance, Uber has sought ways to operate legally in the country, especially after the San Francisco-based company’s CEO Travis Kalanick was indicted by Korean prosecutors in December for violating local transport rules.

Service suspension is nothing new for Uber. The company was forced to suspend service in Nevada and Portland in the U.S. following government resistance. The service was also suspended in Delhi, India last year after a passenger was reportedly raped by an Uber driver.

By Suk Gee-hyun (monicasuk@heraldcorp.com)