Joint venture will combine Uber technology, SKT network
After the failure of both its ride hailing and food delivery operations in Korea, Uber is taking a new approach to the local market — this time in partnership with telecommunications operator SK Telecom.
The two companies will establish a joint venture in the first half of 2021. Uber promised to invest a total of $150 million in its collaboration with the telecommunications operator: $100 million in the joint venture and $50 million in “T Map Mobility,” SK Telecom’s mobility business unit which was approved for a spin-off on Thursday.
“The joint venture will promote 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,” Uber said in a statement Friday.
The first area of collaboration will be cab hailing, where SK Telecom’s T Map Taxi currently ranks second in the country, a long way behind Kakao.
For Uber, the world’s largest ride-hailing operator, Korea has always been a weak point after it first launched its business here in 2013. The company halted its ride-hailing service Uber X two years later, blocked by strong opposition from the local taxi industry and regulation.
Currently, the company operates Uber Black, a premium taxi service; Uber Assist, a taxi service for people with physical disabilities; and Uber Taxi, a cab-hailing app.
“Korea was one of Uber’s first international markets, and we are committed to fully realizing its potential,” said Nelson Chai, chief financial officer of Uber.
“Through our strong partnership with SK Telecom, we will expand access to ride-hailing services in the country, and bring better service to riders and drivers. We look forward to serving the Korean market in the years ahead.”
As for SK Telecom, the spin-off and the partnership with Uber are big steps for the company which has bigger ambitions for its mobility services.
The telecommunications operator started offering a mobile navigation service to its network subscribers in the early 2000s. After the advent of smartphones, this technology was successfully transferred to the mobile app T Map — now a dominant mobile navigation service used by 75 percent of domestic drivers.
SK Telecom believes T Map Mobility’s valuation will stand at 1 trillion won ($873 billion) when it's spun off this year.
“The goal is to boost this valuation to 4.5 trillion won by 2025,” the company said in a statement.
The spin-off is scheduled for Dec. 29 after the move is put to a shareholders’ vote on Nov. 26. The joint venture will be a subsidiary under T Map Mobility.
In a Friday statement, SK Telecom laid out the detailed plans for the spun-off entity.
T Map Mobility will specialize in a wide range of mobility services, which SK explained refers to using information and communications technology to improve convenience in the movement of people and logistics.
Among the immediate tasks suggested are attaching advertisements and other revenue-generating features to the T Map navigation app, on-demand services like ride hailing and a subscription service that will offer discounts to all of SK’s mobility services, from car rentals and car sharing to shared scooters and parking.
The company also hinted at its interest in venturing into the realm of flying cars. A flying car navigation system powered by 5G and artificial intelligence; a 3-D high definition map that can perceive high-rising geographic features and buildings and an aerial traffic control system were fields SK Telecom said it is looking into.
“Together with Uber, the world’s top mobility platform company, we will turn customer’s time and money spent on mobility into time used for more valuable purposes and realize greater safety for all modes of transportation,” said Park Jung-ho, SK Telecom’s CEO.
“To this end, we will work closely with companies with diverse capabilities to address current challenges in transportation, and ultimately usher in a new era of future mobility technologies such as flying cars.”
BY SONG KYOUNG-SON [firstname.lastname@example.org]