DEEP ANALYSIS

Not Just Due to Regulations: 4 Reasons Why Uber and Grab Do Not Work in South Korea

The absence of Uber and Grab cannot be explained by a single line stating they were blocked by regulations. While private car ride-sharing services like UberX are illegal under the Passenger Transport Service Act, Uber remains in a transformed state as a 'taxi-hailing app' rather than fully withdrawing, and Grab never entered South Korea in the first place. The 'Tada incident' was a critical turning point; even though the court ruled it legal, the passage of the anti-Tada law in the National Assembly in 2020 and its dismissal by the Constitutional Court solidified the reality that mobility services operating outside the traditional framework of taxis struggle to survive in South Korea. Uber's sluggish performance was also a strategic miscalculation. Its 'occupy first, negotiate later' approach clashed with the organized taxi industry and dense public transportation, whereas Kakao secured over 90% of the market with 'Kakao T,' which embraced existing taxis (recording approximately 13.58 million MAU as of February 2026). Uber's counterattack in 2026 also failed to narrow the gap; users who briefly increased through the Uber One subscription and Naver partnership dwindled back to about 650,000 as the 'Naver effect' faded, leading Uber to pivot toward niche strategies such as foreign and tourist demand and 'Uber rental.' Autonomous driving has emerged as a variable that will shake all balances anew. With robotaxis becoming commonplace in the U.S. and China, and the Bank of Korea suggesting regulatory relaxation, the full-scale realization of robotaxis will inevitably force a reexamination of the logic behind the current Passenger Transport Act, which has blocked private vehicle operations.