Uber Stock – Uber joins forces with SK Telecom to crack tough South Korea market
SEOUL (Reuters) – Uber Technologies said on Friday it will invest over $150 million in a joint venture and partnership with South Korea’s SK Telecom Co Ltd, which is proposing to split off its mobility business.
The move is Uber’s latest attempt to expand in a market where it has faced tough competition, opposition from taxi drivers and regulations which forced it to stop using private cars for its ride-hailing service in 2015.
The U.S. ride-hailing company currently offers premium taxi-hailing and registered taxi-hailing services in South Korea, a market dominated by local player Kakao’s mobility unit.
The new joint venture would “create opportunities in the taxi-hailing market in Korea and explore new areas, including future mobility services,” the companies said in a joint statement.
Under the plan, SK Telecom would split off its mobility services including satellite navigation and taxi-hailing into a new company called T Map Mobility, which Uber would then back with a direct investment of $50 million and another $100 million in a joint venture structure, the companies said.
Subject to regulatory approval, the joint venture is expected to begin operations in the first half of 2021, the statement said.
The joint venture would combine T Map Mobility’s “network of drivers and mapping technology with Uber’s ride-hailing technology and global operations expertise,” it added.
It is expected to launch a co-branded platform, which riders and drivers of T Map Taxi will be encouraged to join after the launch. T Map Taxi is SK Telecom’s taxi-hailing platform, the second-largest in Korea after Kakao.
Uber will own 51% of the joint venture, while SK Telecom will hold the remaining 49%.
SKT said it expected T Map Mobility, valued at about 1 trillion won ($873.3 million), to grow into a company worth 4.5 trillion won by 2025.
SK Telecom shareholders would vote on the plan at a general meeting on Nov. 26.
Reporting by Joyce Lee and Hyunjoo Jin; Editing by Stephen Coates