Uber faces ban in South Korea. Reuters

South Korea has vowed to shut down ride-sharing service Uber's operations in the country after rejecting the company's proposal to register its drivers for commercial licence.

Having faced increased scrutiny over the legality of its service, Uber earlier proposed that all its South Korean drivers obtain a commercial licence to make the service legal.

That comes after South Korea indicted Uber chief executive, Travis Kalanick, and the company's South Korean unit in December for violating local rules over licensing taxi services.

In a statement, South Korea's Ministry of Land, Infrastructure and Transport said the parallel registration system proposed by Uber cannot be accepted, given the oversupply of taxis in the market.

The ministry also raised concerns that unorganised taxi drivers would be hit by increased competition.

"Transporting customers with private or rented cars and accepting compensation is clearly illegal. The company is ignoring local laws by stating its intention to continue such operations," the ministry said in a statement, as translated by Reuters.

The ministry vowed it would continue to curtail Uber's activities and work with legislators to ban the service.

This has been the latest blow for the US ride-hailing company that has operations in more than 250 cities across the globe.

Its services were banned in the Indian capital New Delhi, following the alleged rape of a female passenger by one of its drivers. The company was also banned in the US city of Portland, Oregon, after launching its service without authorisation from the authorities.

In Spain, Uber suspended its Uber Pop ride-sharing service following a court injunction against it earlier in December. It faces similar court injunctions in Belgium, France, Germany and the Netherlands.

It is also facing probes in China and Taiwan over the legality of the services.