Uber is planning to invest $150 million in a joint venture with South Korean telco SK Telecom, hoping that this will finally allow it to overcome regulatory hurdles that have slowed its growth in tech high-tech market.
SK Telecom will reportedly be splitting off its current mobility services to form a subsidiary called T Map Mobility by the end of the year, which includes satellite navigation and taxi-hailing services. Uber will then invest $50 million into T Map Mobility, with $100 million more invested in a ride-hailing-specific joint venture.
The investment would give them 51% control of the venture, which is expected to be operational early next year.
Until now Uber has struggled to gain a significant foothold in South Korea, primarily due to taxi company-backed regulations in 2015 that barred the use of private cars for ride-hailing services. Instead, the market is instead dominated by taxi-hailing services, of which Kakao is the largest, followed by SK Telecom’s own service.
With SK Telecom’s mobility services are already used by around 200,000 drivers and 750,000 taxi users per month, this base will provide Uber the perfect platform to gain access to the market.
The deal will “create opportunities in the taxi-hailing market in Korea and explore new areas, including future mobility services”, said the companies in a joint statement.
The partnership expects rapid growth; they currently value the venture at just under a billion dollars, but expect to grow to around $4 billion by 2025.
As always, the deal is subject to regulatory approval.
Source: https://www.totaltele.com/507538/Uber-and-SK-Telecom-team-up-for-ride-hailing-JV
