Korea’s Tada Basic service remains banned despite court’s non-guilty verdict

Lee Jae-woong, former chief executive officer of SOCAR Inc. [Photo by MK DB]

Lee Jae-woong, former chief executive officer of South Korea’s car sharing platform SOCAR Inc., criticized the National Assembly for practically banning a taxi service Tada by introducing an amendment to the passenger transport service act, also known as the anti-Tada act, after being proven innocent at court.

“We got continuous and final affirmation that innovation is innocent after a long fight that lasted nearly four years, but politicians who took sides with the vested interest in fear of innovation and crushed it by changing the law,” Lee wrote on his Facebook page on Thursday.

On Thursday, the Supreme Court dismissed an appeal and upheld the lower court’s decision that Lee, Park Jae-wook, former CEO of VCNC Inc. that operated Tada, and VCNC innocent of violating the passenger transportation service act, saying “The lower court’s ruling neither breached the rule of logic and experience nor misunderstood the legal principles in interpreting the provisions of the previous passenger transport service act.”

“Many who worked together to create a new innovation ecosystem lost jobs and many who welcomed the new option of mobility became the underdog again,“ Lee said. “Those who failed to understand innovation and blocked it remain a vested interest. Cursing and prosecuting innovative entrepreneurs and changing the law to block innovation and protect the vested interest should end here.”

[Photo by Lee Seung-hwan]

Tada’s flagship business model, Tada Basic, was a service that provided rentals of an 11-seater van with a driver via a mobile application. VCNC operated the service by using car rental from SOCAR and providing it along with a driver to customers. The taxi industry protested against it, dubbing it an illegal call taxi, and the prosecutors indicted Lee and Park without detention in October 2019 on assumption that their service breached the old passenger transport service act.

However, the lower court and the Supreme Court ruled in favor of the defendants, saying that “Car rental companies in Korea had been renting cars with drivers as a legitimate business, and Tada has only converged it with communication technology.”

Despite the verdict, the previous ride service of Tada may not be revived due to the enforcement of the anti-Tada act. In March 2020, the National Assembly passed an amendment to the passenger transport service act that made the Tada service impossible with the approval of 168 out of 185 lawmakers present at the plenary session.

They passed the bill to get votes from the taxi industry, which felt threatened by the ride service, ahead of the general election. The new law caused many side effects, such as late-night taxi shortages and the monopoly of other taxi platforms, leaving the public the biggest victim. Park Yong-jin, a member of the Democratic Party of Korea, recently left a note of regret for voting for the anti-Tada act, saying, “I am ashamed of my lack of judgment in favoring the bill and reflect on my incompetence.”