Uber joins forces with SK Telecom to crack tough S.Korea market (updated)

SK Telecom Co

16/10/2020 02:47

* Uber to invest over $150 mln in JV, direct investment  
    * Uber forced to stop private car ride-hailing in S.Korea in
2015
    * Local player Kakao dominates S.Korea taxi-hailing market 
    * JV with SK Telecom's mobility biz to launch co-branded
platform

 (Adds SK Telecom mobility platforms' market ranking, monthly
user data)
    By Joyce Lee and Hyunjoo Jin
    SEOUL, Oct 16 (Reuters) - Uber Technologies  UBER.N  said on
Friday it will invest more than $150 million in a joint venture
and partnership with South Korea's SK Telecom Co Ltd
 017670.KS , 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  035720.KS 
mobility unit. 
    The new joint venture would "create opportunities in the
taxi-hailing market in Korea and explore new areas, including
future mobility services," Uber and SK Telecom 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 with 750,000 monthly active
users. Its T Map satellite navigation platform is Korea's
largest with 13 million monthly active users.  
    Uber will own 51% of the joint venture, while T Map Mobility
will hold the remaining 49%. 
    SK Telecom 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.  

($1 = 1,145.0400 won)

 (Reporting by Joyce Lee and Hyunjoo Jin; Editing by Stephen
Coates)
 ((jungyoon.lee@tr.com; +82 2 6936 1467;))