South Korea’s largest mobile carrier, SK Telecom, has partnered up with U.S. ride-hailing app, Uber, to spin off its mobility services, while the latter aims to crack the tough SK market.
According to the mobile carrier’s regulatory filing, the mobility business, called T Map Mobility Co., will be entirely owned by SK Telecom to become its own independent company as of December 29, 2020.
The partnership brings forth a joint venture that will see Uber Technologies directly invest more than $50 million within the new entity that offers mobility services such as satellite navigation and taxi-hailing, while the remaining $100 million will be done via joint venture structure.
“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.
The move is Uber’s latest attempt to expand in a market where it has previously faced tough competition as well as opposition from taxi drivers and regulations which forced it to stop using private cars for its ride-hailing service in 2015.
According to the joint statement, the mobility services venture combines T Map Mobility’s “network of drivers and mapping technology with Uber’s ride-hailing technology and global operations expertise.”
The platform will look to launch in a co-branded manner, where riders and drivers of T Map Taxi will be encouraged to join after launch. T Map Taxi is SK Telecom’s taxi-hailing platform, the second largest in Korea after Kakao.
Under the plan, Uber will own a 51 percent majority stake within the joint venture, while the remaining 49 percent will be held by SK Telecom. “We expect T Map Mobility, which is valued at 1 trillion won ($873.3 million), to grow into a company worth 4.5 trillion won by 2025,” the statement read.