Uber Technologies Inc said on Monday it will connect users to a licensed taxi company in the South Korean city of Incheon, in a bid to comply with local regulations that ban the controversial online ride-sharing service from using private cars.

In a statement, the US-based company said it was partnering with local Incheon-based firm Seven Call Taxi, which operates 3,000 cabs.

The move comes a month after the prosecutors in the capital Seoul indicted Uber CEO Travis Kalanick and the head of the company's South Korean unit for violating transport rules which require drivers and vehicles used in taxi service to be licensed.

The US-based company, which started operating in South Korea in 2013, links users to licensed taxis and unlicensed cars and drivers, a business model that has faced legal challenges in several other cities across the world.

This month, the city of Seoul started offering rewards of up to 1 million won ($929) for people who report private or rented cars providing transport through Uber.

Uber, one of the world's most highly valued venture-backed start-ups, worth at least $41 billion (35.5 billion euros), has faced regulatory scrutiny and court injunctions from its earliest days as a San Francisco start-up.

It has also come under fire for its aggressive response to rivals and critics as well as questions over whether the company has enough safeguards in place to ensure the physical safety and privacy of passengers using its services. ($1 = 1,076.8000 won)

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