Uber, T Map Mobility JV wins antitrust approval; set to launch in April

South Korea's antitrust regulator has approved the proposed joint venture between the US-based ride-hailing company Uber Technologies Inc. and T Map Mobility Co., the mobility division under SK Telecom Co., the Korea Fair Trade Commission (KFTC) announced on Feb. 10.

Last October, Uber filed for a merger review to the KFTC to set up a joint venture with T Map Mobility to drive growth in Korea's future mobility services. Uber and T Map Mobility will hold a 51% and 49% stake in the JV, respectively.

The KFTC determined that the JV would not raise anti-competitive issues, given that the domestic ride-hailing service market would not face much change in market competition. The JV would actually increase competitive pressure on the market's leading business Kakao T, which holds around an 80% market share, according to a KFTC official.

The new JV between Uber and T Mobility is set to launch in April. The JV will help boost the e-hailing business in Korea by combining T Map Mobility's network of drivers and mapping technology with Uber's ride-hailing technology and global operations expertise.

T Map Mobility will oversee the navigation service, T Map, and the T Map Auto service, allowing users to utilize their android smartphone features in the car. The company will also manage on-demand services, such as taxi-hailing and designated driving, and offer subscription services. 

"We will expand our existing business-to-consumer operations and roll out subscription membership services. We plan to touch 4.5 trillion won ($4 billion) in enterprise value by 2025," said Ha Hyung-il, head of corporate development center at SK Telecom.

For Uber, the JV will help the company take another attempt at cracking the tough Korean market, where it faced tough competition. In 2015, it had to stop using private cars for its ride-hailing service in Korea due to strong opposition from local taxi drivers and regulations.

In Korea, Uber offers a premium taxi-hailing service, Uber Black, and a registered taxi-hailing service, Uber Taxi. The US-based company is set to invest around $100 million into the new JV.

T Map Mobility and Uber are expected to transfer their ride-hailing services to the newly set up JV, which riders and drivers of T Map Taxi will be encouraged to join. SK Telecom's taxi-hailing service T Map Taxi is the second-largest market player in Korea, following Kakao T, the taxi-hailing service of Kakao Corp. 

SK Telecom's foray into the domestic mobility market is expected to usher in a significant change. Currently, Kakao Mobility is the leading player with around an 80% market share in Korea's ride-hailing market, while SK Telecom holds about a 20% market share.

But industry watchers say there is a high possibility that the new JV will be able to overtake Kakao via the injection of Uber's expertise and brand power, alongside SK Telecom's navigation service, T Map, which boasts around 12 million monthly active users, almost double the number of Kakao navigation users.

SK Telecom is currently seeking to raise up to 300 billion won to foster T Map Mobility as the country’s largest mobility service. The company recently shortlisted around four to five strategic investors and private equity firms, including IMM Private Equity and Affirma Capital. The final bid is scheduled for mid-February.

Write to Chae-yeon Kim at why29@hankyung.com
Danbee Lee edited this article.