The Uber app which allows clients to connect directly with "black car" services was launched in Seoul in August last year.
But the city council said it bypassed strict controls imposed on licensed taxi drivers, including background checks, insurance and vehicle upkeep and safety.
"We are looking into related laws to block Uber and similar apps that arrange such illegal transportation activities," the council said in a statement.
"Uber users should be aware that it's hard to be covered by insurance even if a car accident occurs, let alone the issues of potential mechanical problems and background of drivers," it said.
The council said it would roll out its own mobile app for hailing existing, licensed taxis in December.
"Uber is charging customers while avoiding the regulatory process, which creates unfair competition for taxi drivers and encroaches on their business," it said.
California-based Uber is the most prominent of the apps that are shaking up the traditional taxi landscape in cities around the world.
It has already faced significant resistance from regulators in several countries, who accuse it of unfair competition and lack of standards.
The firm also sparked angry protests by cab drivers in nations, including France, the United States and Germany, who fear it is chipping away at their client base.
Uber operates in 41 countries in Americas, Europe, the Middle East, Africa and the Asia-Pacific.
By Ruchi Singh
reporter
Park Sae-jin
swatchsjp@ajunews.com
